Limited Companies Case Study

Question 1
Limited companies can be divided into two major types, which are private limited company and public limited company. According to the quote given, we would like to discuss whether the limited company stated in the quote is belonged to private limited company or public limited company. In its first sentence, it stated that limited companies can set a limit on the amount of debts that they will meet. For this quote, both the private and public limited companies have the right to set a limit of debt amount that they will meet. According to the section 4(1) of Companies Act 1965, it states that limited company means a company is limited by shares or by guarantee or both by shares and guarantee. It further states that the members’ liability,

These two types of shares are ordinary shares and preference shares. From the third sentence of the quote “Many companies (limited companies) have preference as well as ordinary share.”, we still cannot conclude that which types of limited companies of the quote is discussed about due to the reason that we will state below. In the section 15(1) of the companies act 1965, there are not restriction of private limited company to issue or have shares if it has complied with the subsection(a), (b), (c) and(d) stated in the companies act. These restrictions stated in the Companies Act 1965 include restricts the right to transfer its shares, limits its member to not more than fifty, prohibits any invitation to the public to subscribe for any shares or debentures of the company, and prohibits any invitation to the public to deposit money with the company for fixed periods or payable at call, whether bearing or not bearing interest. The restrictions do not prohibit any private limited company to issue and have ordinary and preference share. Hence, it is possible for both private and public limited companies to have preference as well as ordinary shares. We cannot conclude that which types of limited companies in the quote is belonged