limited companies & multinationals Flashcards
define incorporated company
business that have separate legal identity from the owner
define private limited company LTD
business that’s owned by a family and close friends who have limited liability and do not trade in the stock market
define public limited company PLC
business that’s owned by outsiders and trader in the stock market
define certificate of incorporation
document that’s required before a new business can start trading
define multinational company
large business that operates all over the world
advantages of private limited company
limited liability, more capital can be raise, business continues if a shareholder dies, has status,
disadvantages of private limited company
public financial information, takes time to transfer shares, can’t raise a lot of money like PLCs, expensive to form
advantages of public limited company
economies of scale, raises more money than LTDs, dominate the market, very high reputation
disadvantages of public limited company
expensive to set up, control may be lost to outsiders, managers take control over owners, public financial information
features of multinational companies
huge assets, highly influential economically and politically, powerful advertising, economies of scale, modern tech
define economies of scale
mass producing goods results in lower average cost
