What are the features of company?

• Owners of a company are known as shareholders
• Independent legal entity (i.e. separate from the people who own, control and manage it)
• Shareholders have limited liability – for the purchase price of their shares only (not company debts)
• A company has unlimited life – not dissolved when owners die or change
• They can be limited by shares, guarantee, No-liability company or Unlimited company

What are the advantages of company?

• Limited liability for shareholders
• Taxation rate (30%) lower than top personal tax rate
• Business expansion networks made easier due to legal structure
• Can raise additional equity (capital) through public share offerings

What are the disadvantages of company?

• More time consuming and costly to set up
• Must comply with complex company rules and other legal requirements
• Taxed from the first dollar of profit 
• Limited liability aspect may causes problems
• Banks often prefer to have director’s personal guarantees instead
• Separation of ownership and control

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