Types of companies

This is a list of types of companies, i.e. legal forms such as the corporation.

Public limited liability company or PLC

(also Inc in US)

• Publicly tradeable shares
• The owners are not liable for legal actions and debts the company may face
• Managed by a CEO elected by a Board of Directors (Board) which in turn is elected by the shareholders in scheduled meetings.
• Extra share holder meetings can usually be called up if enough share holders deem it necessary for some reason
• Usually listed in one or many Stock exchanges
• Rules of stock exchanges define some minimums to capital, cash flow and market value for PLCs to be viable for trading

Limited liability company or LLC

(also Ltd in UK and Inc in US)

• Non-publicly tradeable shares
• The owners are not liable for legal actions and debts the company may face (except in cases of gross negligence in the Republic of Ireland.
• Managed by a CEO (US) or Managing Director (UK) elected by a Board of Directors (Board) which in turn is elected by the share holders in scheduled meetings.
• Extra share holder meetings can usually be called up if enough share holders deem it necessary for some reason

General partnership

• Formed by two or more persons
• The owners are all liable for legal actions and debts the company may face personally
• Created by agreement, proof of existence and estoppel.

In General: A form of business entity in which 2 or more co-owners engage in business for profit. For the most part, the partners own the business assets together and are personally liable for business debts.

Sharing Profits: In the absence of a partnership agreement, profits are shared equally amongst the partners. A partnership agreement, however, will usually provide for the manner in which profits and losses are to be shared.

Unlimited Personal Liability for Losses: Each Partner is, jointly and severally, personally liable for debts and taxes of the partnership. For example, if the partnership assets are insufficient to satisfy a creditor's claims, the partners' personal assets are subject to attachment and liquidation to pay the business debts.

Liability for a partner's debts: Each general partner is deemed the agent of the partnership. Therefore, if that partner was apparently carrying on partnership business, all general partners can he held liable for his dealings with third persons.

Liability for a partner's wrongdoing: Each partner may be held jointly and severally liable for a co-partner's wrongdoing or tortious act (e.g. the misapplication of another person's money or property).

Duration: Technically, a partnership terminates upon the death, disability, or withdrawal of any one partner. However, most partnership agreements provide for these types of events with the share of the departed partner being purchased by the remaining partners in the partnership.

Management and Control: In the absence of a partnership agreement, each general partner has an equal right to participate in the management and control of the business. Disagreements in the ordinary course of partnership business are decided by a majority of the partners. Disagreements of extraordinary matters and amendments to the partnership agreement require the consent of all partners

Transferability: Unless otherwise provided in the partnership agreement, no one can become a member of the partnership without the consent of all partners. However, a partner may assign his share of the profits and losses and right to receive distributions ("transferable interest"). Further a partner's judgement creditor may obtain an order charging the partner's "transferable interest" to satisfy a judgment.

Limited partnership

• Like a General Partnership except for the fact that there is/are so called silent partners who just invest capital into the business and are not liable for legal actions and debts the company may face.

Sole trader

One of the simplest type of company is that run by a single person, a one-man-firm. In the US these enterprises are called sole proprietorships. A sole trader provides the capital for his firm, he makes all the decisions and is personally liable for legal actions and debts. His liability is unlimited; if the business fails, debtors can call upon his private fortune. The profit he makes belongs to him: it is his salary as well as the interest on his capital (if the firm is making profits).

Co-operative

There are two kinds of Co-operatives,

1. those owned collectively by the customers
2. those owned and managed collectively by the Workforce

Reference

• This article is adapted from Consumerium under the clauses of GFDL
• Portions of general partnerships from http://www.mycorporation.com/Genpart.htm