Melmotte Ltd: Questions and Answers

Melmotte ltd

Table of Contents
2.2 Questions ...................................................................................................................................3
Question 1....................................................................................................................................3
a. ..................................................................................................................................................3
b....................................................................................................................................................3
c. ..................................................................................................................................................3
d....................................................................................................................................................4
e....................................................................................................................................................4
f....................................................................................................................................................4
f....................................................................................................................................................5
Question 2....................................................................................................................................5
a....................................................................................................................................................5
b....................................................................................................................................................5
c. ..................................................................................................................................................6
Question 3....................................................................................................................................6
a....................................................................................................................................................6
b. ..................................................................................................................................................6
c. ..................................................................................................................................................7
d. ..................................................................................................................................................7
Question 4....................................................................................................................................7
a....................................................................................................................................................7
b....................................................................................................................................................8
REFERENCES................................................................................................................................9

2.2 Questions
Question 1
a.
Limited liability company means an entity that limits a liability towards the total value of
an unpaid shares (Renz and Herman, eds., 2016). It is company that can open its own bank
account, purchase the property ion its own name and invest in name as the Limited Liability
company.
Sole trader Limited liability company
It is the business that is been controlled and
owned by a single person having unlimited
liability.
This company contains splitting of the
ownership into an equal number of the shares.
The liability is limited only up-to the unpaid
value of the shares.
Limited company Public Limited company
This type of company cannot quote shares on
the stock exchange.
However, PLC could quote its shares within a
stock exchange.
b.
The main purpose of conducting an audit is providing for an independent examination of
the final reports that increases credibility and value of the financial statements (Rothaermel,
2017). It helps in gaining the confidence of the users in respect of final accounts and also reduces
risk of an investor and the cost of the capital.
Investor needs an audit of the financial statement because it helps them in making
appropriate decisions and reduces the possibility of the fraud and an embezzlement within the
business. This induces and helps Grosvenor in making a potential investment in the Melmotte
accordingly.