Characteristics and objective of Share company
A share company is a type of business structure where the ownership of the company is divided into shares that are owned by shareholders. The main objective of a share company is to generate profits for its shareholders. Here are some characteristics and objectives of a share company:
1. Limited liability: Shareholders in a share company have limited liability, which means their personal assets are protected from the debts or liabilities of the company.
2. Separate legal entity: A share company is considered a separate legal entity from its shareholders and has its own legal rights and obligations.
3. Transferability of shares: Shares in a share company can be bought, sold, or transferred without affecting the company's existence or operations.
4. Multiple shareholders: A share company can have multiple shareholders, and the ownership is determined by the number of shares each shareholder holds.
5. Profit distribution: The profits generated by a share company are distributed among its shareholders in the form of dividends or can be reinvested into the company.
6. Public listing: Some share companies may choose to become public companies by listing their shares on a stock exchange, allowing the general public to buy and sell their shares.
7. Corporate governance: Share companies are governed by a board of directors who are responsible for making strategic decisions and overseeing the operations of the company.
The main objective of a share company is to maximize shareholder value and generate profits. This is achieved by creating and maintaining a viable business model, attracting investment, managing resources effectively, and implementing strategies that lead to growth and profitability.
Additionally, share companies may also have specific objectives based on their industry or market segment, such as market leadership, innovation, or sustainability. These objectives help guide the company's actions and decision-making process in order to achieve long-term success and create value for shareholders.