Limited companies are businesses owned by shareholders, with the capital divided into shares.
Shareholders have limited liability and receive dividends from profit. Share capital is described as authorised (the maximum allowed) and issued (actually sold). Companies may also raise long-term finance through debentures (loans). A 5% dividend on RM100,000 of shares is RM5,000.
Remember
- Shareholders have limited liability and receive dividends.
- Authorised capital = the maximum; issued capital = shares actually sold.