1.5.4 Forms of ownership-LTD/PLC Flashcards
What is a Private limited company?
Where a business cannot out stocks on stock market and stocks are invitational only.
What is a Public limited company?
When a businesses stocks can be on the stock market, people contribute funds in return for shares.
What are 3 Characteristics of a PLC?
Limited liability
Sell shares in stock market
Process of floatation is expensive
What are 3 characteristics of a LTD?
Must have 1 or more shareholders
Limited liability
Accounts have to be logged with registrar companies
Name two advantages of a LTD
1)More flexible than PLC
2)Owners can remain in control of company if don’t sell too many shares
Name two disadvantages for a LTD
1)Shares can’t be sold to public
2)Expensive to set up
Name two advantages of a PLC
1)Easier to raise finance from stock market
2)More stable and secure types of business»> less risk
Name two disadvantages of a PLC
1)Possibility of takeover
2)Annual accounts have to be published