joseph Paul
Dec 7, 2023
In relation to the law of persons, outline 6 advantages of registered companies?
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Dec 7, 2023
1. Limited liability: One of the main advantages of registered companies is that they provide limited liability protection to their shareholders. This means that the personal assets of shareholders are protected in case the company incurs debts or legal liabilities. Shareholders are only liable for the amount they have invested in the company.
2. Separate legal entity: A registered company is considered a separate legal entity from its shareholders. This means that the company can enter into contracts, own property, and sue or be sued in its own name. This separation provides legal protection to shareholders and allows the company to conduct business independently.
3. Perpetual existence: Unlike sole proprietorships or partnerships, registered companies have perpetual existence. This means that the company continues to exist even if the shareholders or directors change. The company's existence is not dependent on the life or involvement of any individual.
4. Ease of transferability of shares: Registered companies offer ease of transferability of shares, allowing shareholders to buy or sell their shares without affecting the company's operations. This provides flexibility to shareholders and allows for the easy entry or exit of investors.
5. Access to capital: Registered companies have the advantage of being able to raise capital by issuing shares or borrowing funds from financial institutions. This allows companies to finance their growth and expansion plans, as well as invest in new projects or technologies.
6. Credibility and reputation: Being a registered company enhances the credibility and reputation of the business. It provides assurance to customers, suppliers, and investors that the company is operating legally and adhering to certain standards and regulations. This can lead to increased trust and better business opportunities for the company.
2. Separate legal entity: A registered company is considered a separate legal entity from its shareholders. This means that the company can enter into contracts, own property, and sue or be sued in its own name. This separation provides legal protection to shareholders and allows the company to conduct business independently.
3. Perpetual existence: Unlike sole proprietorships or partnerships, registered companies have perpetual existence. This means that the company continues to exist even if the shareholders or directors change. The company's existence is not dependent on the life or involvement of any individual.
4. Ease of transferability of shares: Registered companies offer ease of transferability of shares, allowing shareholders to buy or sell their shares without affecting the company's operations. This provides flexibility to shareholders and allows for the easy entry or exit of investors.
5. Access to capital: Registered companies have the advantage of being able to raise capital by issuing shares or borrowing funds from financial institutions. This allows companies to finance their growth and expansion plans, as well as invest in new projects or technologies.
6. Credibility and reputation: Being a registered company enhances the credibility and reputation of the business. It provides assurance to customers, suppliers, and investors that the company is operating legally and adhering to certain standards and regulations. This can lead to increased trust and better business opportunities for the company.
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