Question

What are the advantages of Companies? (Any 3)

Answer 1

1. Large Capital:
A company can secure large capital compared to a sole trader or partnership. A large amount of capital is necessary for conducting business on a large scale.

2. Limited Liability:
The liability of a shareholder is limited. The risk of loss is limited to the unpaid amount on the face value of shares held. In the case of a company limited by shares, the liability of a shareholder is restricted to the unpaid amount on the shares held by him.

3. Transferability of Shares:
Transaction of Shares between two individuals is easy. So there is the liquidity of the investment. Any shareholder can easily convert his shares into money by selling his shares.