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ownership 2
limited companies - private and public
| Question | Answer |
|---|---|
| what are some differences between limited companies and partnerships and sole traders? | incorporated - has a separate legal identity from the owner |
| limited liability - owners only risk losing the money that they put into the business | |
| must have a memorandum of association - tells the world who the business is and where it is based | |
| must have an article of association - sets out how the business will be run | |
| owned by shareholders - more shares you own, the more control you get | |
| what is an advantage to being a limited company rather than a partnership or sole trader? | less financial risk for the owners |
| what is an disadvantage to being a limited company rather than a partnership or sole trader? | more expensive to set up |
| what are private limited companies? | businesses where shares can only be sold if all shareholders agree |
| what is a similarity between shareholders in a private limited company? | usually all members of the same family |
| what do private limited companies have after their name? | LTD |
| what are some private limited company advantages? | limited liability, incorporated |
| what are some private limited company disadvantages? | more expensive to set up, legally obliged to publish its accounts every year |
| what are public limited companies? | businesses where anyone can buy shares in the company |
| what do public limited companies have after their name? | PLC |
| what are some public limited company advantages? | more capital can be raised than any other business |
| easy to expand and diversify | |
| what are some pubilic limited company disadvantages? | shareholders have very little say in how the company is run - unless they own lots of shares |
| easy for someone to buy enough shares to take over the business | |
| as there are a lot of shareholders, it is difficult to decide on an agreement on company objectives. this makes it difficult to sacrifice profit to other objectives, like helping the environment. |
Created by:
jirwin
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