PRIVATE AND PUBLIC LIMITED COMPANIES

Question 1

Incorporated

Answer 1

A form of business organisation which is a separate legal entity. It has limited liability and is owned by shareholders.

Question 2

Private Limited Company

Answer 2

A business is owned by shareholders. It is normally identified by the word ‘limited’ or ‘Ltd’ somewhere in the name of the business.

Question 3

Public limited company (plc)

Answer 3

A business owned by shareholders. Shares in the business can be bought and sold without restriction. The business must use the words public limited company or plc somewhere in the name of the business.

Question 4

Limited Liability

Answer 4

The owner of a business does no risk losing personal possessions in order to pay off the debts of the business. They can only lose the money invested.

Question 5

Insolvency

Answer 5

A limited liability company does not risk losing personal possessions in order to pay off the debts of the business when in trouble.

Question 6

Registrar of Companies

Answer 6

Person responsible in the UK for maintaining records relating to the activities of private and public limited companies.

Question 7

Certificate of Incorporation

Answer 7

Legal document issued by the Registrar of Companies allowing a business to trade as a limited liability business.

Question 8

Board of directors

Answer 8

People usually elected by shareholder, which amongst other things, will elect directors to the board and confirm the amount of dividend to be paid.

Question 9

Annual General Meeting (AGP)

Answer 9

A yearly meeting of a shareholders, which elect directors to the board and confirm the amount if dividend to be paid.

Question 10

Chair of the board of directors

Answer 10

The person who takes responsibility for managing the board of directors.

Question 11

Managing director

Answer 11

The person responsible for putting into action the decisions made by the board of directors.

Question 12

Capital

Answer 12

Money usually raised through the sale of shares to investors.

Question 13

Issued share capital

Answer 13

The amount of share capital issued to investors.

Question 14

Minority shareholders

Answer 14

Private individuals who may only own a small percentage of the shares of a company.

Question 15

Major shareholders

Answer 15

These are shareholders who will probably own a large percentage of the shares issued by a company.

Question 16

Institutional investors

Answer 16

Banks and investment companies, which may invest money on behalf of themselves or private individuals. They will probably own a arge percentage of the shares of a company.