Private/public Limited Company

Question 1

Private limited company (LTDS)

Answer 1

Are business owned by shareholders but they cannot sell shares to the public and their main goal is profit maximisation

Question 2

Advantages of LTDS

Answer 2

Shareholders have limited liability
Owners can still have control

Question 3

Disadvantages of LTDS

Answer 3

Legally obliged to publish their accounts meaning competitors become more competitive
Harder to set up and more costly

Question 4

Public limited company

Answer 4

Often a large company, owned by shareholders who have limited liability. The company can sell its shares to the general public

Question 5

Advantages public limited company

Answer 5

Grows faster/ bigger in a short amount of time
Easier to raise finance
Limited liability

Question 6

Disadvantages of public limited company

Answer 6

Owners have little to say
Anyone can takeover company if they buy enough shares
Legally obliged to publish their accounts

Question 7

Shareholders

Answer 7

The owners of a limited company they buy shares which represent a part ownership of the company