Private Limited Comapanies Flashcards
Explain capital and give two types
Money used by firm to set up and run company
Issued share capital VS Authorised share capital.
Explain shareholders
People who buy a share of the company and own part of the company
Give the seven steps to set up a ltd company
- Select company name
- Design your stationary
- Draft memorandum and articles of association
- CRO (Companies registration office ) send forms
- Bank account
- Certificate of incorporation
- Board meeting
Explain articles of association
Shows relationship between shareholders and the company (internal rules)
There is one meeting per year AGM
EGM extraordinary meeting in case of emergency
One vote per share
Explain memorandum of association
Relationship between the company and the outside world
Business company is in
Company name
Address of company
What is the certificate of incorporation
This is a very given by the CRO
Birth cert of the company
This cert makes company a separate legal person and gives shareholders limited liability
Explain authorised /nominal share capital
Maximum amount of shares for sale
Explain issued share capital
Actual amount of share sold
Explain loan capital
Money received from loans either from bank or shareholders.
Is capital a liability or asset
Liability
Explain what happens to assets and liability in the ledger accounts
Each asset and liability gets its own ledger each transaction effects the ledger twice
Every DR has an equal CR
Explain trial balance
A trial balance is a list of closing balances it checks to make sure each DR has an equal CR
Assets should equal liability and they should balance.
