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Why is it easier to attract new shareholders to a plc than a Ltd company?
Wiki User
∙ 15y ago
it is easier to attract new shareholders because a plc has a proven track record, so its less likely to go bankrupt and loose your money.
Wiki User
∙ 15y ago
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What is a corporate business?
Mostly Large scale organisations are corporation, another name for corporation can be 'company' it is owned by shareholders and aims to make a profit. Shares in a public company are usually traded on the Australian Securities Exchange (ASX). Members of the public company are able to buy or sell shares in public companies and such companies have millions of shareholders. BHB Billiton and Telstra are examples of public companies. Private corporations are not listed on the Australian Securities Exchange and have restrictions on who can buy shares. They can have one shareholder but no more than 50 shareholders.
Why is it often easier to start a service business than a good producing business?
Why is it often easier to start a service business than a goods-producing business
What is a company that represents more than one type of insurance and more than one insurance company?
The company offering more than one insurance and representing more than one insurance company is called Corporate Agent.
What is any company with fewer than fifty employees?
A smaller company.
Other than profit what else can you do for the company?
other than profit we can manage people, compenciate them and maintain a good relqationship with customer for the growth of the company.
What are the characteristics of preference shares and ordinary shares?
Preferred shares in a company represent a larger interest in the company than common shares do. Preferred shareholders are paid dividends first, regularly and typically at a higher rate than common shareholders, and if the company declares bankruptcy they have priority over common shareholders who are last in line to get paid.
Why should company recover losses first and not the shareholders?
Because shareholders only invest their money in the business while the company does all the operations and work hard to get the profits.If the company is doing all the operations than they deserve to recover loses first.
What is a parent company?
A corporation is owned by its shareholders. A number of people (shareholders) can invest their money into a corporation and own shares in that company. In a parent company, a company such as the one above starts up another corporation (subsidiary corporation), and the original (parent) company itself owns the shares of the subsidiary. The individual shareholders of the parent own the subsidiary, but indirectly. They are not, themselves, shareholders in the subsidiay -- the parent owns the shares. One of the reasons for this is to "limit" the liability of shareholders. If the parent owns several subsidiares, and one of them gets into financial difficulty, it can be closed down (or sold) without upsetting the operations of the other subsidiaries. Selling one operation as a subsidiary is also easier because it is financially "self-contained." Similarly, if a person or a group of people owns several corporations, they can form a "holding" company, and transfer their shares of each companyinto it, rather than holding them personally. The individuals then become shareholders in the holding (parent) company, and the parent company owns the shares in each of the original companies, which then are subsidiaries of the parent. Indiviuals own shares in parent.> Parent owns shares in each subsidiary.
Whats is Shareholders exercise on control of the company's business?
Shareholders (owners) appoint CEOs and VPs, and if any of them are taking the company in a direction that they believe is too risky or will prove unprofitable than they will act in the interest of the company and sort of veto whatever bad decision they believe the CEO or VP had made. This can also be just firing them.
What are the difference between ordinary share holder and preference share holder?
The three biggest difference between common and preferred shares are: 1) Preferred shareholders take priority over common shareholders in the event of a company is liquidated. 2) Preferred shareholders typically have more voting rights than common shareholders. 3) Preferred shares typically pay higher dividends than common shares.
What is a s corporation?
An S corporation is one that passes corporate income, losses, deductions, and credits to it's shareholders. The shareholders then list these ups and downs on their personal income tax returns and are assessed as individuals rather than a company.
What is the difference between majority and minority shareholders?
A majority shareholder is one who owns more than 50% of a company's shares. A minority shareholder is one who owns less than 50% of a company's shares and lacks voting control.
What are the risks of being a stockholder?
10 common risks associated with shareholders agreements.1. Failing to have a Shareholders AgreementWhether a person or entity is becoming a shareholder in a new company or an existing company, they should be mindful to check whether there is a shareholders agreement.In the absence of a shareholders agreement, shareholders will need to rely solely on the company’s constitution to set out all of the administrative processes – if the constitution has been prepared in a mostly pro-forma or standard form, it is unlikely that it will provide all that is needed.2. New ShareholdersIt is important to ensure that a company’s constitution or a shareholders agreement provides that any new shareholder entering into an existing company is obliged to enter into and be bound by the terms of the shareholders agreement.There is more than one way that this can be done. The constitution can provide that the company only registers a transfer of shares if a deed of accession has been signed by the incoming shareholder and provided to the company.3. Restrictions on Company’s PowersThe terms of a shareholders agreement cannot act to limit the corporate powers of a company under the Corporations Act 2001 (Cth) (Act). If a term within a shareholders agreement is deemed to limit such powers, then it is likely to be void.Anyone involved in the preparation of a shareholders agreement should be mindful of the powers given to a company under the Act when completing a shareholders agreement.4. Restraint of TradeIt is common with small to medium sized companies, where the shareholders also hold director or employee positions, that restrictions are included within the shareholders agreement on the types of activities and work that the shareholders can complete, to limit the risk of any shareholder undertaking activities that compete with the company – this can be both whilst the person remains a shareholder and for a period after they cease to be a shareholder.Without the inclusion of this type of clause, there is a risk of dispute particularly when a person ceases to be a shareholder and seeks to start or work in a competing business. Any clause restraining a person’s activities needs to be carefully drafted to ensure that the correct entities are restrained, and so that the clause is enforceable if needed.5. Management Decisions and Shareholder ObligationsDepending on the type, size and nature of the company the shareholders may wish to retain a level of control and involvement in the management and operation of the company.Shareholder involvement in the company’s management is unlikely to be addressed in a standard constitution, so if this is a specific concern of a particular shareholder or group of shareholders, it needs to be set out in a shareholders agreement.There are different ways of addressing this issue within a shareholders agreement, none of which are standard and will depend on the nature of the company’s business and the expectations of the shareholders.6. FinancialsIf any shareholder or prospective shareholder wants to have control over certain financial decisions or be provided with business plans or other financial projections at any time, a standard constitution would not generally include this right. A shareholders agreement can be used to state which decisions need to be referred to the shareholders, eg for decisions with a liability or cost in excess of a set amount.If the shareholders want these types of rights in relation to decisions, but a shareholders agreement has not been entered into or has not been drafted specifically to cover off on this type of concern, then the company could make decisions that are not in line with the intentions of the shareholders.7. CapitalThere is more than one circumstance in which capital investment becomes a consideration for a company.Where there is a start-up company, it will usually seek initial funding, which is generally as cash in exchange for the issue of shares. However, it is important to remember that not all shareholders provide cash as consideration for shares.8. Issuing or Transferring SharesA company’s constitution often details the process for issuing or transferring shares. Depending on the provisions included in the constitution together with the circumstances of the shareholders involved, it may be that the process needs to be further set out, or additional circumstances may need to be provided for in a shareholders agreement.9. Dispute Resolution:One of the main advantages of a shareholders agreement is to include a process to resolve a deadlock or dispute between shareholders.10. Consistency with Constitution:It is important that any shareholders agreement is drafted with careful consideration of the matters that are addressed within the company’s constitution, so that the two documents governing the company’s affairs and the relationship between the shareholders are not inconsistent with each other.
Why do companies issue stock?
Businesses issue stock to raise capital Advantages of issuing stock: - A Company can raise more capital than it could borrow. - A Company does not have to make periodic interest payments to creditors. - A Company does not have to make principal payments. Disadvantages of Issuing Stock: - The principal owners have to share their ownership with other shareholders. - Shareholders have a voice in policies that affect the company operations. Source Qwoter.com
If you own stock and company fails do you get assets of company?
In general, stockholders of companies are the last in line to get anything when a company fails (assuming non-restructuring bankruptcy) and should not expect to receive anything when assets get sold to pay creditors. The general creditor pecking order is as follows: * Senior Debtholders * Non-Senior Debtholders * Preferred Shareholders * Shareholders When a company goes belly-up, they usually are already in a position where the outstanding liabilities are higher than the value of their assets, so debtholders will be the only ones to collect and they will usually collect less than $1 for every $1 in debt, leaving nothing for shareholders.
What advantages does incorporation give to shareholders and company?
The incorporation of a company has many tax and legal effects on the business. Furthermore, incorporation of a company requires the business to adhere to certain legalities in order to maintain its corporate status. Incorporation of a company may also have a significant impact on the company's ability to attract investors.LiabilityOne of the major effects incorporation has on a company is in the area of limited liability. When a company incorporates, it becomes a separate legal entity from the shareholders of the company. The shareholders of an incorporated company have limited liability for the company's debts and other obligations that may arise while running the business. As explained on the All Business website (http://www.allbusiness.com/), incorporating a company eliminates the possibility that a shareholder's personal assets can be used to satisfy corporate liabilities and obligations.TaxesIncorporating a company means the business will be responsible for its own taxes. In a corporation, the company's taxes are paid separately from those of the shareholders unless a company incorporates as a subchapter S corporation. Shareholders of a subchapter S corporation may pass their share of company profits to their individual or joint tax returns. However, a regular corporation, also known as a subchapter C corporation, may be subject to double taxation. According to the All Business website, an incorporated company must pay taxes on all profits at the corporation's applicable tax rate. Shareholders of an incorporated company must pay taxes on all corporate profits received in the form of dividends. Incorporating a company allows the owners to capitalize on certain tax advantages such as tax-deductible health and life insurance plans provided to the company's employees.StockIncorporating a company allows you to issue stock as a mechanism to raise operating capital and attract investors. Incorporating a company may also allow you to attract key employees by using employee stock options as an incentive. In some cases, incorporating a company allows the business to issue more than one class of stock, which further increases the corporation's ability to attract investors. Each class of stock may have its own associated profit and voting privileges.FormalitiesIncorporating a company means there will be certain state-imposed formalities that must be followed. For example, incorporated companies must hold at least one annual meeting. Depending on the state of incorporation, you may be required to hold the corporate meeting in the state where the business was formed. Furthermore, incorporated companies are required to record corporate minutes. Corporate minutes record information such as the manner in which decisions were reached, as well as election results for corporate directors and officers.ExistenceIncorporating a company may allow it to exist well beyond the life of its initial owners because an incorporated company's existence doesn't depend on the corporation's ownership.
Would it be better for a company to issue shares rather than take out a loan to buy out a company?
A Company shall not issue the shares more than that of it's Authorised capital. It may issue the new shares to the old shareholders of the selling company. A company can purchase another company when it (Purchasing Company) is running in profits only. Then there is no necessity to take bank loans or to issue additional shares for procurement.
