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MGT211
Introduction to Business
Lecture 05
Duties of Partners
 Partners have to maintain accounts which
describe the true picture of the business.
 Partners should use their powers within limits
specified in the partnership deed.
 Partners are responsible to provide accurate
information to Government bodies.
 Partners are responsible to pay their share in
case of loss to the business.
 It is duty of every partner to obey the decision
that has been made in the partnership.
 Partners should not disclose any secret
information about the business to any other
person.
 It is a moral obligation and legal responsibility
of the partners not to use firm’s forum to take
any advantage without intimating to other
partners.
Duties of Partners
 Joint Stock Companies are formed under the
Companies Ordinance 1984.
 Joint Stock Company is an association of
persons for making profit.
Joint Stock Companies
 We can expand the business
 Credit facility
 More capital
 With more capital and more expertise,
companies have more chances to earn more
profit.
 Expansion in the scale of business
Advantages of Joint Stock Companies
 Responsibility of investor is limited to the face
value of shares. This is called Limited
Liability.
 If one person dies or leaves the country, it
does not have any impact on the business.
 Life of the joint stock company is longer than
sole proprietorship and partnership.
 It is easy to transfer rights.
Advantages of Joint Stock Companies
 Company can hire better experts which
results in better management.
 Public place more confidence in companies
rather than in any other form of business.
 Anyone can exit from joint stock company by
selling his/her shares.
Advantages of Joint Stock Companies
 Formation of joint stock company is very
lengthy, very complicated and very technical
job.
 Lack of interest.
 There is not much secrecy found in
companies.
 Companies pay double taxation to the
Government.
Disadvantages of Joint Stock
Companies
 Delayed decision making
 Power is centralized because there are few
people who hold major portion of company’s
shares.
Disadvantages of Joint Stock
Companies
 Number of members
 For a public limited company, minimum
number of members are seven.
 For a private limited company, minimum
number of members are two.
 Issue of shares
 Public limited company is bound to promote
issue of shares to general public through
media.
 There is no such provision for private limited
company.
Public Limited Company Vs. Private
Limited Company
Public Limited Company Vs. Private
Limited Company
 Name of the company
 Public limited companies add the word “Ltd.”
with their name.
 Private limited companies add the word “(Pvt)
Ltd.” with their name.
 Annual report
 Public limited companies have to present their
data to general public.
 There is no such provision for private limited
company.
Public Limited Company Vs. Private
Limited Company
 Transfer of shares
 It is easy to transfer shares in public limited
companies.
 In private limited company, shareholder
cannot transfer the shares without the consent
of other members.
Public Limited Company Vs. Private
Limited Company
 Statutory meeting
 It is obligatory for the public limited company to
hold statutory meeting.
 There is no such obligation for privet limited
company
 Submission of annual report
 It is obligatory for the public limited companies
to submit their annual report to registrar
Corporate Law Authority.
 It is not necessary for private limited company.
Public Limited Company Vs. Private
Limited Company
 Taxation
 Public limited company pays double taxation
at different income tax rates.
 Private limited company pays tax only once at
different income tax rates.

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Introduction To Business - MGT211 Lecture 05.ppt

  • 2. Duties of Partners  Partners have to maintain accounts which describe the true picture of the business.  Partners should use their powers within limits specified in the partnership deed.  Partners are responsible to provide accurate information to Government bodies.  Partners are responsible to pay their share in case of loss to the business.
  • 3.  It is duty of every partner to obey the decision that has been made in the partnership.  Partners should not disclose any secret information about the business to any other person.  It is a moral obligation and legal responsibility of the partners not to use firm’s forum to take any advantage without intimating to other partners. Duties of Partners
  • 4.  Joint Stock Companies are formed under the Companies Ordinance 1984.  Joint Stock Company is an association of persons for making profit. Joint Stock Companies
  • 5.  We can expand the business  Credit facility  More capital  With more capital and more expertise, companies have more chances to earn more profit.  Expansion in the scale of business Advantages of Joint Stock Companies
  • 6.  Responsibility of investor is limited to the face value of shares. This is called Limited Liability.  If one person dies or leaves the country, it does not have any impact on the business.  Life of the joint stock company is longer than sole proprietorship and partnership.  It is easy to transfer rights. Advantages of Joint Stock Companies
  • 7.  Company can hire better experts which results in better management.  Public place more confidence in companies rather than in any other form of business.  Anyone can exit from joint stock company by selling his/her shares. Advantages of Joint Stock Companies
  • 8.  Formation of joint stock company is very lengthy, very complicated and very technical job.  Lack of interest.  There is not much secrecy found in companies.  Companies pay double taxation to the Government. Disadvantages of Joint Stock Companies
  • 9.  Delayed decision making  Power is centralized because there are few people who hold major portion of company’s shares. Disadvantages of Joint Stock Companies
  • 10.  Number of members  For a public limited company, minimum number of members are seven.  For a private limited company, minimum number of members are two.  Issue of shares  Public limited company is bound to promote issue of shares to general public through media.  There is no such provision for private limited company. Public Limited Company Vs. Private Limited Company
  • 11. Public Limited Company Vs. Private Limited Company  Name of the company  Public limited companies add the word “Ltd.” with their name.  Private limited companies add the word “(Pvt) Ltd.” with their name.  Annual report  Public limited companies have to present their data to general public.  There is no such provision for private limited company.
  • 12. Public Limited Company Vs. Private Limited Company  Transfer of shares  It is easy to transfer shares in public limited companies.  In private limited company, shareholder cannot transfer the shares without the consent of other members.
  • 13. Public Limited Company Vs. Private Limited Company  Statutory meeting  It is obligatory for the public limited company to hold statutory meeting.  There is no such obligation for privet limited company  Submission of annual report  It is obligatory for the public limited companies to submit their annual report to registrar Corporate Law Authority.  It is not necessary for private limited company.
  • 14. Public Limited Company Vs. Private Limited Company  Taxation  Public limited company pays double taxation at different income tax rates.  Private limited company pays tax only once at different income tax rates.