Choosing The Right Legal Structure

Question 1

What is a plc and a ltd

Answer 1

Plc - public limited company

Ltd -private limited company

Question 2

Explain positives and negatives about them(plc and ltd) and how they are formed

Answer 2

Plc:
+ anyone can buy shares, limited liability, likely to be large, float on stock market.
- anyone can buy shares, risk of takeover
Ltd:
+ limited liability, invitation only, no risk of takeover
- invitation only, smaller businesses,
They are made by :
1. Memorandum of association -shows consideration of external stakeholders
2. Articles of association - shows consideration of internal stakeholders
3. To companies house - certificate of incorporation

Question 3

Explain some facts about ltd and PLCs

Answer 3

Limited liability
A stakeholder is someone who is effected by the business
Both have shares
Likely to be large

Question 4

Explain the process of floatation

Answer 4

Flotation is the process of changing a private company into a public company by issuing shares and soliciting the public to purchase them.