About Companies

What is a Company?
A company is a separate entity which is for the purposes of law a separate legal personality from the people who own it. The owners are called shareholders and their liability for the debts of the Company is generally limited to the paid up value of the shares they own in the company.

It is formed when a group of people exchange money and/or property for shares in an enterprise registered under the Companies Act.

It is probably the most common form of business structure because it provides some advantages that one should look at when going into business. The shareholders are not the business but they have shares in the business. The owners or shareholders in the company are merely holding an interest in the business.

It is also possibly the best entity to use if a business owner is serious about separating the family assets from the business. If the company fails, because it is a separate person it cannot call on the assets owned by the owners or their families.

What is a Limited Liability Company?
A limited liability company is a company which has limited liability. The limited liability entity was created to give protection from liability to owners of a business.

A limited liability company is a separate legal entity, or legal person, in the eyes of the law.

The benefit of a limited liability company is that the shareholders in the business do not have to pay any more than they owe on their unpaid shares (if they are unpaid) in the event of the company failing.

This means that the personal liability of the people involved in the business is limited to the extent granted by law. In the case of shareholders, their liability is limited to the amount still unpaid on the shares they have taken in the company.

In the case of directors and officers of the company, their liability is limited to the extent where there is no liability provided they have complied with all the requirements set down under company law, as to their duties and responsibilities.