SS2 Second Term Financial Accounting Lesson Note – Quoted and Unquoted Companies and Private and Public Companies

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WEEK 3

TOPIC:  Quoted and Unquoted Companies and Private and Public Companies

 Private and public companies: (a) Private companies: (i) Definition (ii) Features (b) Public companies (i) Definition (ii) Features (c) Distinguish between private and public companies

CONTENT:

1. Private companies
2. Public companies
3. Quoted Companies
4. Unquoted Companies

Sub-topic 1. Private companies.

Definition.

Private company is defined by section 22 of CAMA 1990 as a company, which by its articles limits the number of its members to fifty and restricts the right to transfer its shares. Example of this is Obasanjo Farms Nig. Ltd.

Features

1. It must be specifically stated in its memorandum of association that it is incorporated to be a private company.
2. Private companies restrict the right to transfer shares to outsiders.
3. The required membership is a minimum of two and a maximum of fifty.
4. Its shares are not quoted on the stock exchange market.
5. It does not invite the public to subscribe to its shares.
6. The name of the company must end with “Limited”.
7. It has a simple way of appointing its directors.

Sub-topic 2:  Public companies

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