classification companies on the basis of liability

Company Limited by Shares

A company where the liability of each member is limited to the amount unpaid on their shares.

Liability of Members

The extent to which members or shareholders are responsible for the debts of the company.

Company Limited by Guarantee

A company where liability is limited to the amount promised by each member in case of winding up.

Unlimited Company

A company where members have unlimited liability, meaning personal assets can be used to pay company debts.

Purpose of Company Limited by Shares

Typically formed for commercial purposes to generate profit for shareholders.

Capital Structure of Company Limited by Guarantee

Funding usually comes from grants, donations, and membership fees rather than share subscriptions.

Examples of Company Limited by Shares

Public and private limited companies like Apple Inc. and Microsoft Corp.

Typical Members of Company Limited by Guarantee

Members do not hold shares and contribute through guaranteed amounts.

Risk Associated with Unlimited Companies

Members accept higher risk as their personal assets are liable for company debts.

Funding Sources for Companies Limited by Guarantee

Often includes grants, donations, and income from membership fees or other activities.