Good Looks Pvt. Ltd. was promoted in the year 2000 by a group of four friends. As business of the company has grown
considerably over the years, its management is now planning to convert it into a public company and raise funds in next
six months to finance its future expansion plans in health care business.
On the basis of the given information, answer the following questions:
(a) State any four privileges that the company will have to forgo as a private company after conversion.
(b) State any two values that should not be ignored by the promoters of this company
Dear Student
a) Some of the privileges that the company will have to forgo after the conversion are:
a) Some of the privileges that the company will have to forgo after the conversion are:
- A private company is not needed to issue a prospectus as public is not invited to subscribe to its shares.
- In case of a private company, no restrictions are imposed for the amount of loans to directors but in case of public company; there is a restriction on the amount of loan.
- A private company needs just 2 Directors whereas a public company needs 3 Directors.
- In case of private company, one can start the business just after incorporation whereas in case of public company, one can start the business only after having the certificate to commence business.
- Moral Value: Moral values are the values or qualities which are worth striving for and also is regarded as right to the professionalism.
- Innovation: Innovation is a term which again adds a very important value to every organisation as it enhances and widens up the opportunity & creativity levels.