Limited Liability Companies

Private Limited Companies

Can have an authorized capital of less than 50,000 Cannot offer its shares for sale to the public at large, unlike a public company.

Bonus shares

Free shares, paid for by utilizing the company's reserves, issued to shareholders without them having to pay anything for them.

Preference shares

Gets an agreed percentage rate of dividend before ordinary shareholders receive anything

Public Limited Company

Is defined as one which fulfils the the following conditions: Has a memorandum starting it is a public company and is registered as such. Has an authorized shared capital of at least 50,000 Minimum membership of one, no maximum. Ends its name with 'Public Limited Company" or PLC. Can, but don't have to, offer their shares for sale on the stock exchange.

Ordinary shares

Receive the remainder of profits available for dividends.

Called - up capital

The total amount asked for on all the issued shares

Authorized share capital

The total of the share capital which the company is allowed to issue to shareholders

Cumulative Preference shares

These also have an agreed maximum percentage dividend. However, any shortfall of the dividend paid in a year can be carried forward. These arrears of preference dividends will have to be paid before the ordinary shareholders receive anything.

Non-cumulative Preference shares

These can receive a dividend up to an agreed percentage each year. If the amount paid is less than the maximum agreed amount , the shortfall is lost by the shareholder. The shortfall cannot be carried forward and paid in a future year.

Issued Share capital

Total of the share capital actually