1.5.4 - limited companies

Question 1

Limited Company

Answer 1

A business organisation that has a separate legal identity from it’s owners

Question 2

Limited companies have limited liabilities T/F

Answer 2

TRUE

Question 3

Limited Liability

Answer 3

A legal status which means that a business owner is only liable for the original amount of money invested in a business ( their private assets remain safe)

Question 4

Features of limited companies

• all features including board of directors part mind-maps

Answer 4

(Mindmap)

Question 5

How is capital raised in a limited company

Answer 5

By selling shares to shareholders

Question 6

Each shareholder owns a share which makes them a joint of the company T/F

Answer 6

TRUE

Question 7

What do shareholders get from profits

Answer 7

Shareholders get dividends from profits

Question 8

Dividends

Answer 8

a distribution of profits by a corporation to its shareholders.

Question 9

Shareholders with more shares will have more… and get more…

Answer 9

more control and get more dividends

Question 10

How to form a limited company

Answer 10

• have to follow legal procedures when forming a limited company
• This Includes sending documents to the Registrar of companies

Question 11

What are these documents

Answer 11

• Article of association
• Memorandum of association

( Blue textbook pg 131/132)

Question 12

If the documents are acceptable then what do businesses get

This allows it to do what?

Answer 12

Businesses get a certificate of incorporation

This allows it to trade as a limited company