Chapter 2 - Financial Statements

Question 1

• Public Limited Company (PLC)

Answer 1

A company can become a PLC if:

• It has issued Share Capital of £50,000
• Has at least two members (Shareholders) and at least two directors
• Can raise capital from the public on the stock exchange, not not all do.

Question 2

• Private Limited Company (LTD)

Answer 2

Defined by the companies act as “Any company that is not a public company”.

• No minimum Share Capital
• At least one shareholder and at least one director
• Not publicly available but capital can be transferrable between individuals

Question 3

• The Objective of Financial Statements

Answer 3

“The objective of Financial Statements is to provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions”

Question 4

• Reporting Deadlines for PLC/LTD’s

Answer 4

Public Limited Company = 6 Months

Private Limited Company = 9 Months