PREPARED FOR : P.M ALICIA TAN PREPARED BY : ELLY SOFIA SALJI( ) NORHAMIZA MAAN( )
You are a Chartered Secretary in public practice. Mr James Lee and his colleagues who are educationist, have approached you for advice on whether they should form either: (a) a private company limited by shares, or (b) a public company limited shares, or (c) a public company limited by guarantee
Purpose limited by shares either public or private: acquiring profit limited by guarantee :non profit making Capital limited by guarantee: incorporated without share capital limited by shares :required to have capital If they have sufficient capital, they can form a private company but if they do not have sufficient capital, they can form public company by inviting the public to subscribe shares of the company so that they can rise up the capital.
Shares Public company limited by shares: they can offer its shares to the public and the shares are transferable Private limited company by shares: the company cannot have any invitation to the public to subscribe for any shares of the company.
Liability: the members liability towards the company debts in the case of winding up. Limited by shares: the liability of member is only to the extend of unpaid share Limited by guarantee: the members have guaranteed to contribute to the assets of the company in case of winding up
Membership: every company must have at least 2 members. For the private: maximum number is 50 For public company:there is no maximum numbers of members Registration Fees: it is depends on the amount of authorized share capital of the company. The highest the amount of capital, the highest amount of fees will be. The minimum is RM 100, 000 of share capital.
It is advisable for Mr Lee to start with the private company first. Then after the company has well established and acquire more capital, Mr Lee can convert the company to the public company limited by shares. However, everything is depends on the purpose or nature of the business either for profit making or charitable purposes