The Company Organisations that raise their finance by means of - TopicsExpress

The Company Organisations that raise their finance by means of issuing shares to the public or to a selected group of the public through invitation are companies (named a ‘public’ or ‘proprietary’ company respectively). In this way large amounts of ‘capital’ can be raised to commence the business or to expand. The liability of the owners for the debts of the company is limited to the amount unpaid on their shares. Therefore, if a shareholder has bought 1000 shares in XYZ Co. Ltd. at $2.00 per share, and has paid $1.50 on each of these shares, then the liability to the company in the event of failure is limited to 50 cents 1000 shares = $500.

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