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SS1: ECONOMICS - 2ND TERM

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  1. Firms & Industry | Week 1
    4 Topics
  2. Firms & Industry (Business Organisation) | Week 2
    5 Topics
    |
    1 Quiz
  3. Population Theory I | Week 3
    3 Topics
  4. Population Theory II | Week 4
    3 Topics
  5. Population | Week 5
    3 Topics
  6. Population Distribution | Week 6
    4 Topics
  7. Population Census | Week 7
    3 Topics
    |
    1 Quiz
  8. Labour Market | Week 8
    3 Topics
    |
    1 Quiz
  9. The Nature of the Nigerian Economy | Week 9
    4 Topics
    |
    1 Quiz
  10. Agriculture | Week 10
    4 Topics
    |
    1 Quiz



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A Private Limited Liability Company is established by a particular set of people (2 to 50) with limited liability. They are not allowed to sell their shares to the public except for private placement.

Features of a Private Limited Liability Company:

  1. The membership of participants: Members or owners are from two to fifty.
  2.  Governed by memorandum and article of associations.
  3. The business is a separate legal entity.
  4. The shareholders have limited liability.
  5. There is continuity of business operation.
  6. There is a board of directors.
  7. The raising of capital is through the issuing of shares.
  8. Shares are not easily transferable.
  9. It cannot request the public to subscribe to bonds or debentures.

If a business is a separate legal entity, it means it has some of the same rights in law as a person. It is, for example, able to enter contracts, sue and be sued, and own property. A sole trader or partnership does not have a separate legal entity.

Advantages of Private Limited Liability Company:

  1. They raise capital more easily than a partnership.
  2. They are not liable for the payment of debts. Shareholders have limited liability.
  3. It iss a separate legal entity.
  4. The business enjoys internal economies of large-scale production. Since the business is large, production can be carried out on a large scale. 
  5. The business has greater continuity.

Disadvantages of Private Limited Liability Companies:

  1. The amount of capital for the business is not as large as that of public companies.
  2. A private limited liability company cannot advertise its shares publicly or sell them directly to the public.
  3. The shares of a private liability company cannot be easily transferred. 
  4. There is personal contact with the employee and customers.
  5. There is a delay in decisions making.
  6. Public cannot be invited to subscribe to shares, bonds or debentures.

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