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WHAT ARE THE ADVANTAGES OF A COMPANY ?

The separate legal person of a company exists independently of the members.

A limited company has limited liability for shareholders.

In the event of failure of the business, shareholders are protected against the loss of more than the nominal value of their shareholding.

It provides greater capital potential than sole proprietorship and partnership. Most companies have ease in securing finance for growth.

WHAT ARE THE DISADVANTAGES OF A COMPANY ?

There are considerable legal procedures involved in setting up a company and possible high cost of incorporation. This include the procedures incurred in publishing the various financial accounts of the company.

Small limited companies may have difficulties to borrow as extensively as desired, precisely they have limited liability thus banks and financial institutions may be unable to recover their funds if the business fails.

The growth of private limited companies may be limited as they cannot offer shares to the general public thus pass-through of losses to investors is not available. Private limited companies restricts the right of members to transfer their shares.

WHAT ARE THE OWNERSHIP FEATURES OF A COMPANY ?

A company must have a minimum of two members. However, a private limited company is limited to have only 50 members whilst a public limited company has no limit. The 50 members limit for a private company does not include the employee or its subsidiaries.

WHAT IS THE MINIMUM CAPITAL REQUIREMENTS TO START A COMPANY ?

You only need a minimum paid up capital of RM2 to start a private limited company.

Public limited company requires to have an issued and paid-up capital of not less than RM60 million comprising ordinary shares of not less than 10 sen per share if it is seeking listing of and quotation for its securities on the Main Board of the KLSE or a minimum issued an paid-up capital of RM40 million but less than RM60 million comprising ordinary shares with a per value of not less than 10 sen per share for listing on the Second Board of the stock exchange.