Plcs

Question 1

Definition and features of private limited company

Answer 1

• it is recognised by the initials ltd after its name.
• it does not have to publish its annual financial statements.

Question 2

Definition and features of a public limited company

Answer 2

• company which can sell its shares on the stock market to the public.
• there is no limit to the number of shareholders it may have.

Question 3

Advantage of a public limited company

Answer 3

• all shareholders in a plc benefit from limited liability.
• equity can be raised by selling shares on the stock market.

Question 4

Disadvantages of a public limited company

Answer 4

• a PLC must publish its financial statements
• the setting up of a plc is determined by numerous legal regulations.