Economic Project

Contents

Introduction

Business Registration

~Meaning

~Registration Procedure for Sole Proprietorship and Partnership

~Registration Procedure for Limited Company

~Registration Procedure for Overseas Company

~Registration Fee and Levy

~Payment Methods

~Cancellation

Sole Proprietorship

~Definition

~Popularity

~Set-up process

~Advantages

~Disadvantages

~Reason of suitable for Small Business

~Examples

Partnership

~Definition

~Features

~Forms/Establish

~Liability

~General partnership

~Limited partnership

~Advantages

~Disadvantages

~Tax rate

~Dissolution and Termination

Limited Company

~Meaning

~Advantages

~Disadvantages

~Private limited companies

~Public limited companies

~Shares

~Procedures of Formation

~Taxes

Comparison

Conclusion

Working Table

Shares

  The provider of a share of the capital is called a shareholder and is issued with pieces of paper called shares (or share certificates). After a certain time shares can be consolidated into stock. These stocks and shares can be sold on the Stock Exchange in a way described in a companion volume Commerce Made Simple, should the shareholder wish to cease being a shareholder and have the money back again.1

  Most of the decisions of a company are taken by the board of directors (unless the articles are very unusual), but certain powers are specifically given to the members by the Company Act and these cannot be taken away by the memorandum or articles. In addition to these powers which are guaranteed by law, certain powers are also given to members by the articles. The members have power to elect new directors and to declare dividends. It should be noted that the powers given to members are given collectively; therefore, a shareholder (or group of shareholders) who controls the majority of the votes at a company meeting is obviously in a far stronger position than a ‘minority’ shareholder.

  A majority shareholder has extensive powers of control, exercisable ultimately by removing or threatening to remove the directors from office. A minority shareholder often has no real power (unless he is a director and/or can persuade the majority to agree with him), but his position is protected by a number of a number of rights, most statutory.2

  Shareholders inject capital and receive a return (dividend) in proportion to the capital they invest. They are eligible to attend an annual general meeting to approve or approve or otherwise the way the directors are running the business. Annual general meetings also determine how much of the profit will be distributed to shareholders.

  Voting is in accordance with the number of shares held and the meeting can replace all or any of the directors if a majority is dissatisfied with them.

  Shareholders can, if a majority request, call an Extraordinary General meeting to question directors about performance, outside the Cycle of Annual General Meetings.

  Control of the company is in the hands of directors who are appointed by the shareholders to run the company on their behalf.

  The company is a legal entity in its own right and stands alone from the directors and shareholders, who have limited liability.

 When a company is created it will have am “Authorized Shareholding” that specifies the limit of a shareholders liability, if all shares have been issued then shareholders are not liable for any more debts that the company may accrue. 3

1 Business Studies (Second Edition)– Geoffrey Whitehead

   Butterworth - Heinemann Ltd (1994) P88-89

2 Business Law – Anthony King & John Barlow

   Blackstone Press Limited (1993) P.71

3 How To Set Up And Run A Company (First Edition) - Michael Lane

   Straightforward  Publishing  (1998) P23

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