2. According to the Company Law of China, companies are divided into limited liability companies and joint stock limited companies.
3. Limited liability company, referred to as limited company for short, the shareholders are liable to the company to the extent of their capital contribution, and the company is liable to the company's debts with all its funds. According to the Company Law, such companies must indicate the words "limited liability company" or "limited company" in the company name.
4. A joint stock limited company, referred to as a joint stock company for short, has all its capital divided into equal shares, and the shareholders are limited to the shares they hold. Take responsibility, the company takes responsibility for the company's debts with all its assets. This kind of company, according to the company law, must be in? The name of a company shall be marked with the words "Limited by Share Ltd" or "Limited by Share Ltd".
Whether it is a limited company or a joint-stock company, their biggest feature is that shareholders' responsibility to the company is limited and limited by their capital contribution. That is to say, when the company's assets are insufficient to repay the debts owed, shareholders do not have to bear joint and several liability for repayment, that is, they do not need to pay debts for the company.
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Characteristics of a limited liability company:
1. Limited liability company (limited company for short) is the most important organizational form for China enterprises to implement corporate system.
2. Register in accordance with the Regulations of the People's Republic of China on the Administration of Company Registration. Its advantage is that the establishment procedure is relatively simple, and there is no need to issue an announcement or account number. In particular, the company's balance sheet is generally not open, and the company's internal institutions are flexible. Its disadvantage is that it is impossible to issue shares publicly, and the scope and scale of funds raised are generally small, which is difficult to meet the needs of large-scale production and operation activities. Therefore, the form of limited liability company (limited company) is generally suitable for small and medium-sized non-joint-stock companies.
3. For starting a business, a limited liability company is a more suitable enterprise type. Most investment and financing schemes and VIE structures are designed based on limited liability companies.
Baidu Encyclopedia: Limited Liability Company