Summary for Company Accounts
- Limited companies have limited liability, which means that their members’ liability in the event of insolvency is limited to the amount of capital they put in.
- There are two types companies,
1. Private companies
2. Public companies
- Limited companies must keep accounting records.
- Limited companies have a share capital, it divided
1. Authorized share capital
2. Issued share capital
3. Called up share capital
4. Paid up share capital
- Dividends are appropriations of profit.
- Ordinary shares are different from preference shares, mainly because they carry no right to a fixed dividend.
- Revenue reserves are available for distribution. Capital reserves are not.
- Debentures are long term liabilities, not capital. Unlike dividends, debentures interest must be paid.
- Companies must pay corporate tax on their profits.