3.1.2 Buisness Forms Flashcards
What is capital
Money raised to start or develop a business
What is unlimited liability
Where responsibility of all debts of business rests on owner
What is limited liability
Where responsibility of all debts is limited to the amount invested by a sharesholder
What is a dividend
Money paid to shareholder from profits if a limited company
What is a sole trader
A business owned by one Person
Positives of being a sole trader
Easy and cheap to set up
Owner has control
Keep all profits
Financial info not shared
What are the negatives of being a sole trader
Unlimited liability
Long work hours
Continuity
Shortage of capital
What is a private limited company (Ltd)
A business owned by at least two share holders
What are the positives of being a private limited company
Limited liability
Continuity
Control over share
What are the negatives of being a private limited company
Some financial info available
Admin
Dividends
What is a public limited company (plc)
A business pended by shareholders. Shares in business can be bought and sold on stock exchange
What are the positives of being a public limited company
Ability to raise large capital
Easier to borrow
Limited liability
What are the negatives of being a plc
Possibility of takeover
Costs
Financial info available
What are the factors that influence a PLCs share price (within company control)
Dividend policy
Relationship with investors
What are the factors that influence a PLCs share price (outside company control)
State of economy
