Introduction to Limited Liability Companies

Introduction to Limited Liability Companies

Pick n Pay is an example of a limited liability company. Image credit tmsm.co.zw

Pick n Pay is an example of a limited liability company. Image credit tmsm.co.zw

ZIMSEC O Level Business Studies Notes: Introduction to Limited Liability Companies

  • Contrary to popular belief among students and common people the word company is not synonymous (the same as) the word business.
  • Not all businesses are companies as we have already seen there are other types (forms) of businesses that are not companies for example sole traders, partnerships and franchise businesses.
  • The word “company” is often used by people when referring to Limited Liability Companies.
  • Limited Liability Companies are a group of companies found in the private sector whose liability is limited.
  • This means that the owners of such companies only loose the amounts that they have invested in the business in the event of the business becoming insolvent.
  • Hence the use of the word limited in the name of these companies.
  • Limited companies are usually required to use the word limited as part of their name for example “Econet Wireless¬†Limited.”
  • Ownership of such business is in the form of shares.
  • The capital of companies is divided into units called shares.
  • Also companies are treated as separate entities under the law.
  • This means that the company can enter into contracts and sue and be sued in its own name.

To access more topics go to the O Level Business Notes page.

By |2018-07-23T11:30:34+00:00December 11th, 2015|Notes, O Level Business Studies Notes, Ordinary Level Notes, Principles of Accounts Notes|Comments Off on Introduction to Limited Liability Companies

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He holds an Honours in Accountancy degree from the University of Zimbabwe. He is passionate about technology and its practical application in today's world.
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