Introduction to Companies Flashcards
What are key features of a company?
- Separate legal entity
- Limited liability
- Subject to Companies Act 2006
Who are primary stakeholders in a company?
Shareholders, directors, POSC
What is the main distinction between public and private companies?
Public companies can offer shares to the public and subject to stricter requirements
What is required for a public company to trade?
A trading certificate and minimum share capital of £50,000
What are the different types of copmany?
1) Private companies limited by shares (Ltd)
2) Private companies limited by guarantee
3) Unlimited companies
4) Public companies
5) Listed companies
What are characteristics of a Ltd company?
1) No minimum share capital
2) Prohibited from offering shares to public
What are characteristics of a private company limited by guarantee?
1) No share capital
2) Liability of members limited to amount the agree to contribute in event of winding up
3) Membership not transferable
What is effect of unlimited company on members?
Liability of members is unlimited
How many directors does public company need?
Minimum two
What type of company can become listed?
Only public companies
What makes a listed company?
Admitted on regulated investment exchange such as London Stock Exchange
Do companies NEED a secretary?
Only public companies
Do companies NEED to have annual general meetings?
Public must have once a year minimum
What are advantages of a company?
1) Investment with limited liability
2) Minimises risk
3) Gives formal structure for business to run
4) Easier to raise finance through issue of shares / bank loans
5) Potential for return on investment through dividends
What are disadvantages of a company?
1) High levels of formality
2) Public disclosures
