Limited Company

What Is The Limited Company?

Companies established by one or more real or legal person/people under a trade name are called limited companies. The basic capital of this type of company is certain and this capital consists of the sum of the basic capital shares. Limited companies, which can be established for any economic purpose and subject that are not prohibited by law, cannot operate only in the fields of insurance and banking.

, a public company should maintain a directory of its members.

Limited companies cannot have more than 50 partners, and a single partner company can also be established. The partners are not responsible for the debts of the company, they are only obliged to pay the basic capital shares they have committed. At the same time, they must fulfill the additional payment and side performance obligations stipulated in the company contract.

Who Owns A Limited Company?

Before establishing a Limited company, you should first conduct market research. The business line in which you want to establish your limited company should be addressed and market research should be conducted on the past, present and future of this business line. You should investigate the secret of the success of the companies that have been thriving for a long time in the field in which your Limited Company wants to operate. Likewise, you should be aware of the mistakes of companies that have a shorter life.

Before establishing a limited company, you should have extensive knowledge with good market research. After choosing the business line you want to operate in, you should research other types of companies and choose the most suitable type for your company. Limited companies are generally limited to shares. That means they belong to shareholders with certain rights. For example, it may require shareholders to vote and accept changes in the company. Collateral-limited companies have guarantors and a secured amount instead of shareholders and shares.

What Are The Benefits Of The Limited Company?

The main advantages of a limited company are that it has a corporate image when compared to sole proprietorships, there is no obligation to complete the capital in cash at the time of establishment, and it has a much simpler organizational structure when compared to a joint stock company.
The limited company also has cost advantages in establishment, bookkeeping entry, trademark registration and other registration procedures, fees and payments. However, depending on the number of partners, capital amount, signing powers and similar conditions; The company establishment costs that will occur in the notary and commercial registry are slightly higher than that of a sole proprietorship.
Limited companies become corporate taxpayers unlike sole proprietorships. The company pays 20% corporate tax from the profit for the period (2021). If the partners of the company want to transfer the remaining profit from the Corporate Tax to their own accounts, they make a dividend distribution. Dividend distributions are also subject to Income Tax.

Can One Person Own A Limited Company?

A limited liability company is a company whose capital is fixed and divided into shares, and which is liable for its debts only with its assets. A limited liability company can be established with one partner.

How Is A Limited Company Formed?

People who want to establish a limited company can do so by completing certain steps. The stages of establishment of a limited company are as follows;
● Accountant selection
● Collection of necessary documents for company establishment
● Preparation of the articles of association for a limited company
● Tax and bank Processes
● Registration in the commercial register
● Power of attorney and declaration stage
● Tax office notification
● Municipality transactions

What Is The Difference Between Limited And Private Limited?

A public limited company refers to a company whose securities are publicly traded on an open market. On the other hand, a private limited company is one that is not listed on the stock exchange as its shares are privately held by the members.
Although a private limited company is prohibited by law from inviting the public to subscribe to its shares or bonds, a public limited company can choose for a public subscription to raise capital through an IPO.
To talk about the transfer of shares, there are restrictions in the articles of association regarding the transfer of private limited company shares. This transfer requires the approval of the Board of Directors. In contrast, in the case of a public limited company, there are no restrictions on the transfer of freely traded shares on an open market called a stock exchange.

Do Limited Companies Pay Tax?

Limited firms, unlike single proprietors, do not pay income tax or direct national insurance. Instead, they pay taxes after deducting allowable expenditures and wages from their business revenues. This is referred to as Corporate Tax.

When Should You Start A Limited Company?

In order for a business to become a limited liability company, it is necessary to look at the individual conditions of the business first. One of the main factors determining the status of a limited company or starting a business as a limited company from the very beginning is the possibility of making financial savings.
One of the characteristics of a limited liability company is that the establishment is more complex than other types of companies. Those who want to establish a limited company should pay attention to this.

What Are The Characteristics of a Limited Company?

These are the some characteristics of a limited company:

● Members
The law states that a private limited company must have at least two members and the maximum member limit is 200.

● Number of managers
The law states that a private limited company must have at least two directors, while the maximum number of directors is 15.

● Limited liability
All members or shareholders of a private limited company have limited liability. This means that if the company suffers a loss under any circumstances, its shareholders will not be obliged to sell their personal assets for payment. They will be liable to repay only the amount of the stock they have committed or the amount of the guarantee they have committed to pay.

● Permanent succession
Permanent succession means that the company will continue to exist under the law regardless of the insolvency, bankruptcy or death of any of its members. The life of the company goes on forever.

● Authorized and paid-in capital
The private limited company must have an authorized capital of Rs.1 lakh. Due to the amendment made in the Companies Law, it is not required to have a minimum paid-in capital. Prior to the amendment to the law, it was required to have a minimum paid-up capital of Rs.

● Name
Private limited company names must have the words ‘private limited’ after the name. For example, if the company name is ABC, it is named ‘ABC Pvt. Ltd’ in all official communications and company registration forms.

● Prospectus
The prospectus is a detailed description of the state of the company’s business. A company issues a prospectus to the public to subscribe to company stock. However, a sole proprietorship cannot issue a prospectus as it cannot invite the public to subscribe to its shares.

● Member Directory
A private company is not required by Law to maintain a directory of its members. Whereas