JSS1 Business Studies Lesson Note on Limited Liability Company

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Limited Liability Company (Private Limited Liability Company)

CONTENT

1. Private Limited Liability Company (Meaning)
2. Advantages, Disadvantages and Comparison between Public and Private companies

Meaning of Private Limited Liability Company:

A private limited liability company is a profitable making business with few shareholders and no open market for its shares. Examples of private limited liability company are Newswatch Communication Ltd.,  Ekene Dili Chukwu Transport service Ltd., JIMBAZ Construction Company Ltd. etc.

Advantages of Private Limited Liability Company

(i) They enjoy privacy.

(ii) Their annual report and accounts are not required by law to be published, except for taxation.

(iii) Management and control is less complex than in public limited company. Its management structure is simple.

Disadvantages of Private Limited Liability Company

(i)    Shares cannot be issued to the public.

(ii)   Capacity to raise external finance to expand business is limited.

(iii)  Transfer of shares to others is made difficult.

Comparison between the Private and Public Limited Liability Companies.

S/N	PUBLIC LIMITED COMPANY	PRIVATE LIMITED COMPANY
1.	Minimum number of members is seven and has no maximum	Minimum number of members is two while the maximum is fifty.
2.	Shares are offered to the public.	Shares may not be offered to the public.
3.	Shares are easily transferable.	Shares are not transferable.
4.	Account is publish to the public	Account is published for the information of Registrar of companies.

PUBLIC ENTERPRISES.

Public enterprises are companies owned by government. These are formed through Acts of parliament (in a civilian government) or by Decree or Edict (in a military government) which also states what their powers are.

Some examples of public enterprise or public corporations are: Nigerian Railway Corporation, Nigerian Ports Authority, Stat Water Corporations and Nigerian National petroleum Corporation (NNPC).

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