Business Ownership For Growing A Business

Question 1

When a business grows, what may they decide?

Answer 1

To sell shares on the stock market. Meaning they gain PLC status

Question 2

What does PLC stand for?

Answer 2

Public limited company

Question 3

What are the characteristics of a PLC?

Answer 3

• Shares are bought and sold on the stock exchange
• Shares are open to anyone
• Most shares in a PLC are owned by organisations rather than individuals
• Business can expand at any time by selling more shares to raise finance
• Limited liability

Question 4

What are the advantages of PLC?

Answer 4

• Limited liability: only lose your investment
• Easy to raise capital: issue more shares
• Banks more willing to lend money to a large well established company: less risk
• Easier to grow and expand

Question 5

What are the disadvantages of a plc?

Answer 5

-Expensive
•a lot of administrative work
•raise at least £50,000
-Issue more information about itself expensive to produce
-Has to prepare Annual Accounts: printed and sent to all shareholders
-Make them available for general public and competitors to see, so they will know what your plans are for the business