The different types of company

Private limited company

All companies that are not public companies are defined by law as private. Being a private company is the default position. Private companies can range from a small family company to a subsidiary in a large group that is a substantial trading entity in its own right. Sometimes, they will simply be trading vehicles for one or two individuals who want the benefit of limited liability or the added kudos of trading as a company.

As such, the private company is a very flexible format that can be adapted to fit numerous different requirements. But the one thing that a private company cannot do as a matter of law is offer its shares to the public. Any private company that wants to issue shares to the public must first become a plc or public limited company.

Private companies will, therefore, usually have fewer shareholders than a public company, and there will often be restrictions on the transfer of their shares. Those with a very small number of shareholders, including those that are subsidiaries, might ban all transfers of shares that are not first approved by the board of directors. This allows the board to control who becomes a shareholder and, ultimately, who controls the company.

Companies with a larger shareholder base might have more sophisticated rules that allow the transfer of shares by a shareholder but first require that they are offered to existing shareholders (under ‘preemption provisions’), thereby giving them the opportunity to keep ownership within the existing group and to exclude new shareholders.

Public limited company

If you want to be a public rather than a private company, you must take a number of steps. You will need:

• A name that ends with the words ‘public limited company’ (or the Welsh equivalent); permitted abbreviations are PLC, plc or Plc.
• An issued share capital with a nominal value of at least £50,000 and paid up share capital of at least £12,500 (or the equivalent in euros). You could, for example, issue 50,000 £1 shares, or 250,000 20p shares, each paid up at least to one quarter of its nominal value – 50,000 £1shares paid up as to 25p on each share, or 250,000 20p shares paid up
  as to 5p on each. (There is no equivalent minimum for a private company.)

A public company is subject to more stringent controls than a private one in a number of areas. Some of them are listed below.

• The rules on making loans to directors are more restrictive for all companies in a group where one of the members is a public company.
  
• A public company can purchase or redeem its own shares, but it can only pay for them by using those profits from which dividends can be paid. A private company, on the other hand, has the option of using its capital if distributable profits fall short.
• It is a criminal offence for a public company to give financial assistance for the purchase of its own shares, for example by lending money to someone buying a stake in the company. Since October 2008, there has been no equivalent ban for private companies.
• Many private companies are allowed to prepare abbreviated accounts each year. Public companies, on the other hand, have to prepare and file with Companies House a full set of accounts, and pay the added costs that may involve.
• A public company must have a company secretary and hold an AGM each year; a private company can dispense with both.

what is company???

A company is a form of business organization. It is an association or collection of individual real persons and/or other companies, who each
provide some form of capital. This group has a common purpose or focus and an aim of gaining profits. This collection, group or association of persons can be made to exist in law and then a company is itself considered a "legal person". The name company arose because, at least originally, it represented or was owned by more than one real or legal person. In the United States, a company is a corporation— or, less commonly, an association, partnership, or union—to carry out an enterprise.Generally, a company may be a "corporation, partnership, association, joint-stock company, trust, fund, or organized group of persons, whether incorporated or not, and (in an official capacity) any receiver,
trustee in bankruptcy, or similar official, or liquidating agent, for any of the foregoing."In English law and in the Commonwealth realms a company is a body corporate or corporation company registered under the Companies Acts or similar legislation.It does not include a partnership or any other unincorporated group of persons, although such an entity may be loosely described as a company.

Role of finance in Business......!

The goal of any finance function is to achieve three benefits: business support service, lowest costs and effective control of the environment. Money is the lifeblood of a business and finance is the nerve center. Finance is required to promote or create a business, gain assets, develop products, run market surveys, advertise. The conventional view of finances focuses on being reactive, efficient, quantitative and risk averse. New innovative views focus on being vision-oriented, opportunity and growth focused, intuitive and risk-taking.
Budget And Forecasting

Budgeting and forecasting relate your business to the outside community. Driven by earnings and growth estimates, stock prices rely on timely data forecasting to achieve optimal price and market capitalization. Small businesses benefit from this knowledge even though not publicly traded. Knowledge of raw material requirements, personnel and staffing demands, and expansion requirements force entrepreneurs to thoughtfully consider their needs.
Bookkeeping

Also referred to as the close, Finance, Money Business and Stock Market website defines bookkeeping as the “process by which all subsidiary ledges and journals of the organization are summed up for a given time.” A close can be small and simple or incredibly long and complicated depending on the size and complexity of the company. Your company should be able to close within a few hours, so the process can happen daily.
Reporting

Any company with shareholders or outside financing should have standard external reporting requirements. External reports focus on how banks, shareholders and the general public all relate to the organization. Stockholders rely on reports of data forecasting and budgeting when determining when to buy and sell, so accurate data defines the entire process.
Payables And Receivables

The finance department manages all cash flow into and out of a business. Vendors and creditors need payment correctly and on time to keep things running smoothly. You need to stay liquid--the right amount of cash on hand--at all times and finance must maintain payment plans that keep everything on track.
Importance

Due to public trading, large company owners tend to be widely scattered with management sometimes located in another place entirely. The management must ensure the owners’ economic welfare to stay employed. A company’s success and growth occurs when the principles and procedures of corporate finance are followed. Corporate finance forms the backbone of a corporation. Without accurate and timely information, the system would fall to pieces.