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 Form 2 Business Studies: Forms of business units lessons

Types of companies and features of a private company:

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Answer Text:
Types of companies:
They are of two types:
-Private limited company
-Public limited company
Private limited company:
-A private limited company is a business unit with a minimum membership of two and a maximum of 50.
Features of a private company:
-The number of shareholders is limited to between 2 and 50 excluding employees of the company.
-The transfer of shares is restricted.
-It is managed by board of directors.
-They are not allowed to sell shares to the public
-Perpetual continuity-its life may not depend on the life of members.
-Profits made by the company are shared according to share capital contribution.
-It can only start operations after receiving certificate of incorporation.


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