1.4.1: limited companies (incorp businesses)

Question 1

dividends

Answer 1

a share of the profit; some is kept for the business

Question 2

types of limited companies:

Answer 2

public limited companies (Plcs)
limited liability partnership (LLPs)
private limited companies (Ltds)

Question 3

to form a lc you must…

Answer 3

• have the articles of association (outlining rules, shareholder voting rights, accounts)
• have the memorandum of association (name, address, LL, shares)

Question 4

pros of Ltds

Answer 4

• limited liability
• can sell shares to family & friends (extra capital = easier growth)
• are incorporated (separate legal entity)

Question 5

cons of Ltds

Answer 5

• must pay dividends to shareholders
• expensive to set up
• accounts are not private
• can’t sell on the stock market