Unit of Inquiry: Friday 7th May 2021

 What is a company? (continued)

 Types of companies

Watch Mr. Pem’s video:

 Mr Pem - Friday UoI

Types of companies:
Watch the video and read the article below to understand types of
companies, focusing on public and private companies:
 What is a company? - YouTube

What is a company?
A company is a business organization, which is created by law. It refers to a group of
people, created to carry out business of some kind. A company has a separate legal
existence (from human beings), an ongoing ‘life’ and its own common seal (signature).

What is a private company?

A private company is registered under the Companies Act by two or
more persons. The members of a private company are restricted
from transferring shares. The maximum number of members in a
private company is 200. In most cases, a private company is owned
by the company's founders, management, or a group of private
investors. Examples of private companies: Emtel, Mauritius Commercial Bank (MCB) and
Omnicane.

What is a public company?

A public company is formed by at least 7 members with a lawful
object. A public company is a company that has sold all or a
portion of itself to the public through an initial public offering.
Examples of public companies: Gamma Civic, ABC Motors and Mauritius Union Assurance
Company Limited.
Government Company:
A Government company has at least 51% paid up share capital owned by Central
Government and State Government, or partly by Central and partly by the State
government.
Examples of government companies: Mauritius Telecom, Air Mauritius and Mauritius
Revenue Authority.

What is an organizational structure?

An organizational structure is a system that outlines how certain activities are directed in
order to achieve the goals of an organization. These activities can include rules, roles, and
responsibilities. The organizational structure also determines how information flows
between levels within the company.
Examples are below:

Your Task:
Complete the chart below.
Write down the definition of each type in your own words using the article and/or videos.
Write down the features of each type of company, including the advantages and
disadvantages.
You can also watch these videos below to help you (including the one above):
 What is a company? - YouTube
 Public vs Private Companies - What's the difference between a public and private company?
 Private vs Public limited company: Difference between them with definition & comparison chart

Public Companies Private Companies

Definition:
A company whose shares are traded freely on private companies may issue stock and
a stock exchange.
Features:
1. Officers and shareholders of
a company are not held
personally liable for its debts.
2. Transferable Shares: As already
noted, public companies are
distinguished by their offer of
traceable shares to the
general public
Advantages:
 financial information
 SEC approval.
Definition:
have shareholders, but their shares do
not trade on public exchanges and are
not issued through an initial public
offering
Features:
1. Number of Members.
2. Member's liability is limited.
3. Minimum paid-up capital.
4. Restriction on shares transferability.
5. Private limited.
6. Perpetual Succession.
7. Separate legal entity.
Advantages:
 Professional Reputation
 Legal Duties.

Disadvantages:
 Increased government and
regulatory scrutiny. Public
companies are vulnerable to
increased scrutiny from the
government, regulatory agencies,
and the public.
Other:
Disadvantages:
 Poor protection to members: ...
 No valuation of investment: ...
 Lack of public confidence:
Other: