Private Limited Companies Essay Example | Topics and Well Written Essays - 3000 words

Private Limited Companies - Essay ExampleThis discussion gives various(a) aspects of the Company law, the development of the sequestered limited company and the role of the joint stemma companies.Private and public companies tend to depend on frugal forms of centralizing, organizing and operating(a) capital and with the availability of the registration process from the acts of 1852 and 1882, and these companies could gain limited liability from the process. The explanation on why this has occurred could be understood on the basis of the economic circumstance following the great depression. The historical process related to the formation of companies has been related to economic changes through the great depression as well as profound procedures available.The birth of the private limited company has a long history and in the centre of such history lies technological contributions and the innovation processes of the companies, the legal structure of the time and the economic polic ies and effects of the market that either brought about success or failure of such limited companies. Innovation or changing certain functions and structures of an organization is viewed as a process of organizational dynamics rather than a consequence of technological developments and the focus is on corporate organization through innovation and vice versa. Freeman et al (2007) used example of the British coastal shipping companies in the early 19th century as their approach to business changed with the introduction of steam technology. The transition also brought in changes in the decision making process and there were some assumptions on share professer involvement in this sector. Governance relations were however very important in private companies as were resource allocation decisions. In a study, Weir et al (2005) suggest that with poor stock market performance, companies tend to go private due to reasons of undervaluation. With management buy outs the firms are privatized due to non optimal governance structures and problems with institutional ownership (Weir et al, 2005). Existing firms with poor market valuation and with limited market pressure tend to engage in more private transactions. Providing arguments for and against privatization of companies, Sellers (2003) stated that private companies can become public agencies although these have to be in accordance with government demands and contracts. In fact the government is responsible for making suggestions and setting up the requirements and provides recommendations to private companies and this government suggestion turn private companies more like public ones2. The company managers are sometimes caught between these needs of government contracts and their own business acumen (Sellers, 2003). These are however some problems of change from private to public agency although government aid would be an advantage in this case. The stock market perf