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Office de la Formation Professionnelle

et de la Promotion du Travail

OFPPT

LEGAL FORMS OF BUSINESS

A partner consists of at least two individuals. The abbreviation “& co” follows the name of the
company. If it belongs to a family, the words “& sons” or “bro’ (brothers) are added.

If a company has unlimited liability its owners’ property (assets) may be confiscated in case they

fail to pay a debt. If it has a limited liability, the individuals who own the company (the
shareholders) are only responsible for the capital they have contributed. Each one has a number
of shares depending on the amount of money he has invested.

In case of bankruptcy shareholders would lose nothing except their shares. This is known as a
limited company. The letters “Ltd” are always placed after the name of the company.

People can buy shares of a public limited company (PLC). A limited company does not sell its
shares.

Shareholders own a company but they do not manage it. Some of them may not even know
anything about commercial or technical matters. The work is usually done by a committee of
management called the Board of Directors. This group of people decides what should be done.
They develop the company policy. The shareholders elect a new board each year. In turn, the
new board appoints a chairman, a vice chairman, a secretary and a treasurer.

A- Choose the best answer

1- The abbreviation “& co” stands for:

a- A partnership
b- A limited liability
c- Two companions

2- partnership may be:

a- Limited or unlimited
b- Only limited
c- Only unlimited

.-3 A limited company’s assets includes::

a- What the company produces

b- Everything that belongs to the company and its owners
c- The company’s shares, offices and machinery.

. 4- If a company has an unlimited liability, the guaranty is:

a- the company’s assets
b- The owner’s personal property
c- The company’s assets as well as the owner’s property

B-Answer these questions

1-List the advantages of a limited company.
2 - Why don’t shareholders usually manage a company?
3-What’s the function of a board of directors?

C- Production:
Write a paragraph talking about your business project you intend to
set up in the future regarding its legislative form of your business.