Companies Flashcards
Who owns a company?
A company is owned by shareholders.
What voting rights do owners of ordinary shares have?
Owners of ordinary shares have one vote for every share they have.
What does it mean for a company to have its own existence in law?
It means that a company can own things such as land and equipment.
What is limited liability?
Limited liability means that shareholders can invest in companies and be aware of the most they can lose if it all goes wrong.
What is a key advantage of a company?
An advantage of a company is limited liability.
What is another advantage of a company?
A company has better status in the eyes of customers.
What happens to a company after the death of its founders?
A company continues after the death of the founders.
What can a company do to attract investors?
A company can bring in investors.
What is a disadvantage of forming a company?
You have to register the company.
What information must a company disclose?
A company has to disclose information on sales and profits.
What financial requirement must a company meet?
A company has to have accounts independently checked.
What is a potential issue with having multiple investors?
If there are other investors, the original founders are not in full control of the business.
Who controls the company and makes daily decisions?
The people who control the company and make decisions are called managers.
In many private limited companies, who are the managers?
In many private limited companies, the shareholders are the managers.
What is the difference between ownership and control in public limited companies?
In public limited companies, the shareholders and managers are often different groups of people.
