Business, 26.06.2020 16:01 Frostbite9371

2 features of private limited companies.

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Answer from: shimmerandshine1

(1) Legal entity

(2) Perpetual existence

Explanation: A very simple definition of a private limited company would help with subsequent explanation of its features or characteristics.

A private limited company is a business organization with private ownership being held by a few parties known as the shareholders, and these ones have their liability limited to the amount of shares contributed to the business capital. The total membership of owners is limited and hence the name "private."

There are a quite a number of features of a private limited company and two of these are;

(1) Legal Entity

(2) Perpetual Existence

(1) Legal Entity:

Once an organization has been registered as a "limited liability company," it immediately takes it own identity. What this means is that the laws of the country now recognizes the company as an individual with its own name and identity and is clearly distinct from the shareholders (owners of the company). This means the private limited company can have a bank account opened in its own name, it can sue and be sued to court in its own name (and not in the name of the shareholders), and so on. Basically, legal entity implies that a private limited company is now a person on his/her own and all matters that concern the business organization shall be seen as the company. Hence all assets and liabilities belong to the company and not the shareholders.

(2) Perpetual Existence:

Perpetual or continuous existence as the name implies means the company can continue to remain in existence into the foreseeable future and no time limit can affect it. Also the death or exit of one or more members (shareholders) cannot affect the existence of the company. So if for example, one members retires and exits the company and later dies as a result of old age, with or without replacement of the ex member, the company continues to exist uninterrupted (remember the company is now a person on its own under the law). This explains why many multinationals such as banks and oil and gas producing companies have been in existence for decades and some close to two hundred years in existence (and still counting).

Answer from: Quest

24 years, i believe is the correct answer.

Answer from: Quest

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