Lecture 9 Flashcards
What are the main features of limited companies?
- Legal nature
- perpetual life
- limited liability
- legal safeguards
What are the two main forms of limited companies?
Public limited company (Plc)
Private limited company (Ltd)
Ordinary shares = ?
Represent the basic units of ownership of a business
Ordinary shareholders are the primary risk takers as their shares are distributed only after all other claims are settled
They have voting rights
Preference shares = ?
Units of ownership in a business
where if a dividend is paid, the preference shareholders will be entitled to the first part of it up to a maximum value
Maximum is usually defined as a fixed percentage of the nominal value of the preference shares
What are the types of reserves?
Revenue reserves
Capital reserves
What are the sources of long-term finance?
Share issues
Retained earnings
Long-term borrowings
What various parts of shareholder’s equity are available for withdrawal?
Share capital & capital reserves = not available for withdrawal
Revenue reserves = available for withdrawal
What are the sources of external accounting rules for a UK Plc listed on the LSE
Company law
IFRS
Stock exchange rules imposed by FCA