Company Law 2


private and public companies
Private companies usually have limited or Ltd at the end. Of their name. They are not allowed to sell their stocks or shares on a open market. Most companies to around 2000 public limited companies PLCs. These companies have plc at the end of their name, and their shares are publicly traded on the london stock exchange.
A stock exchange is a market where anyone can buy stock and shares. The US equivalent of a PLC is a company or corporation registered with the securities and exchange commission SEC.
SEC registered companies, also known as listed companies, have to make quarterly reports every three monthst.
They report on :

  • sales revenue or turnover the money received by the company in that period from selling goods or services.
  • gross profit turnover less cost of sales
  • net profit gross profit less administrative expenses and tax
  • Companies on the london stock exchange, known as quoted companies, have to produce a half yearly interim report which inform shareholders about the progress of company’s. These reports are not audited.

    All companies with shareholders or or stockholder have to send them an annual report each financial year. This contains a review of the year’s activity and an examination and explanation of the company’s financial position and results. There are also financial statements and notes, and the auditors report on the financial statements.

    AGMs Annual General Meeting

    Public companies have to hold an Annual General Meeting and most private ones do too. At this meeting the shareholders can question directors about the content of the annual report and the financial statements, vote to accept or reject the dividend recommended by the directors and vote on replacements for retiring members of the board.
    The meeting can also carry out other business stated in the company’s memorandum of association of certificate of incorporation and articles of association or Bylaws.

    If there is a crisis, the directors or the shareholders can request to hold an extraordinary general meeting to discuss the situation. For example, if there are claims of misconduct by directors, where they have behaved illegally, there could be an EGM.

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