BCom Accounting – Semester
2 Notes
, • 1. Introduction to Companies
•In Financial Accounting, a company is a legal entity that is
separate from its owners (shareholders). This means that the
company can own property, sue or be sued, and enter
contracts independently of its shareholders. Companies are
established in terms of the Companies Act and are usually
classified as either public or private companies. The main
distinction lies in shareholding and reporting requirements:
public companies can offer shares to the public and must
publish their financial results, while private companies cannot
2 Notes
, • 1. Introduction to Companies
•In Financial Accounting, a company is a legal entity that is
separate from its owners (shareholders). This means that the
company can own property, sue or be sued, and enter
contracts independently of its shareholders. Companies are
established in terms of the Companies Act and are usually
classified as either public or private companies. The main
distinction lies in shareholding and reporting requirements:
public companies can offer shares to the public and must
publish their financial results, while private companies cannot
