plc and ltd Flashcards
What is a Private Limited company :
LTD is a company owned by its shareholders and managed by a director. Shareholders have a say in the company’s director
List 2 features of a Public Limited Companies …
➜ is owned by shareholders –family members and friends that are invited
➜ cannot advertise its shares to the general public –NOT SOLD ON STOCK MARKET
4 ADVANTAGES of ltd
Limited Liability
- if there are any debts in the company , the shareholders will never ever pay their own fiance instead the companies assets and investments will be at risk
Easier to raise finance through shares
Control on who shareholders are
- Shareholders are only invited to become a shareholder
If the business founders die, the company still exists
3
DISADVANTAGES
of ltd
No access to stock exchange - Smaller volume of fiance coming in through shareholders
Expensive and Legal to set up
Legal requirements include publishing company accounts- Competitors could see
What is a Public Limited Company ?
A public limited company is one that has shares that are sold to the general public. These shares can be bought and sold easily on the Stock Exchange.
3 ADVANTAGES of plc
A greater number of potential investors therefore it may be possible to raise very large sums of money by selling shares.
The shareholders have limited liability
Can advertise its shares to the general public.
3 DISADVATAGES of plc
A plc cannot control who buys its shares, so managers may find that a competitor buys control of the company and takes it over.
it is expensive to set up, requiring a minimum set up cost of £50,000
shareholders will expect to receive a percentage of the profits as dividends
shareholders may clash when making decisions about the business
