Unit 1- Public Limited Company Flashcards
What is a public limited company?
A public limited company (PLC) is a type of business entity that can sell shares to the public and is listed on a stock exchange.
True or False: A public limited company can raise capital by issuing shares to the general public.
True
What does the abbreviation ‘PLC’ stand for?
Public Limited Company
Fill in the blank: A public limited company must have a minimum share capital of _____ in the UK.
£50,000
What is one key requirement for a company to be classified as a public limited company?
It must be registered with the relevant regulatory authority and have its shares available for sale on the stock market.
Which regulatory body oversees public limited companies in the UK?
The Financial Conduct Authority (FCA)
True or False: Shareholders in a public limited company have limited liability.
True
What is the primary advantage of becoming a public limited company?
The ability to raise significant capital by selling shares to the public.
Which of the following is NOT a characteristic of a public limited company? A) Limited liability B) Ability to issue shares C) Unlimited number of shareholders D) Private ownership
D) Private ownership
What is the main disadvantage of being a public limited company?
Increased regulatory scrutiny and the requirement to disclose financial information publicly.
Short answer: What is the typical structure of a public limited company?
It typically has a board of directors and shareholders.
True or False: Public limited companies are subject to different accounting standards than private companies.
True
What is an Initial Public Offering (IPO)?
An IPO is the process through which a private company becomes public by offering its shares to the public for the first time.
Fill in the blank: In a public limited company, shareholders are entitled to receive _____ based on company profits.
dividends
What does it mean for a public limited company to be ‘listed’?
It means that the company’s shares are traded on a stock exchange.
What is a key disadvantage of public limited companies regarding ownership control?
Ownership is diluted among many shareholders, leading to potential loss of control for original owners.
True or False: Public limited companies are subject to less regulatory scrutiny than private companies.
False
Fill in the blank: Public limited companies often face pressure from __________ to deliver short-term results.
shareholders
What is one financial disadvantage that public limited companies may experience?
They incur high costs related to compliance, reporting, and governance.
Multiple Choice: Which of the following is a disadvantage of public limited companies? A) Easier access to capital B) Vulnerability to market fluctuations C) Limited liability D) Tax benefits
B) Vulnerability to market fluctuations
