Private Limited Companies

Question 1

Dividend

Answer 1

-amount that is paid out of the net profit of the company each year to shareholders

Question 2

Advantages of a PLC

Answer 2

• limited liability
• business continues when an owner dies
• easier to raise money as there are up to 50 shareholders
• will have many differently skilled people

Question 3

Disadvantages of a PLC

Answer 3

• set up is arduous
• decision making shared
• profits shared
• more costly to set up
• many rules to be followed

Question 4

Share capital

Answer 4

• when you need money to start your company you can sell shares to people
• these shareholders are willing to invest money in the business to obtain part ownership of the business and also to share profits (dividends)

Question 5

Authorised Share Capital

Answer 5

-maximum amount of shares you are allowed to issue out to people

Question 6

Issued share capital

Answer 6

Amount of shares you have actually sold

Question 7

Board of directors

Answer 7

• Shareholders elect the board of directors to run the company on their behalf
• up to 12 people
• they elect a managing director/chief executive to run the company on a day-to-day basis

Question 8

Four documents involved in the formation do a PLC

Answer 8

• Form A1
• Memorandum Of Association
• Articles of association
• certificate of Incorporation

Question 9

Form A1contains….

Answer 9

• name and address of business
• name of company secretary
• details of directors
• company’s acts
• declaration of compliance
• director’s concert and signature

Question 10

Memorandum of Association contains

Answer 10

• name and address of business
• business’ objectives
• shareholders and their # of shares
• limited liability
• capital

Question 11

Articles of Association contains

Answer 11

Rules of the company

• name and address of business
• shareholder voting procedure
• director election procedure
• number of directors
• business’ share charitable
• shareholder meeting procedures

Question 12

What does a company do with the completed Form a1, Memorandum and Articles of Association?

Answer 12

• send them to the registrar of companies in Dublin castle

- if the registrar approves they send a Certificate Of Incorporation

Question 13

Certificate of Incorporation

Answer 13

The document that proves that the business has been registered as a private ltdcompany

Question 14

AGM

Answer 14

Annual General Meeting

• legally obliged
• all shareholders must b invited
• board of directors will let the shareholders know how the company is performing

Question 15

Shareholders

Answer 15

• 2-50
• shares cannot be bought by the general public
• receiver a share of profits called a dividend