Higher Accounting - Company Accounts Theory (plc)

Which of the following features does NOT relate to a Private Limited Company (Ltd)?

• Does not sell shares to the public - invited shareholders only

• Shareholders have limited liability - they cannot lose more than the amount of money they have invested

• Usually owned by only a few people (shareholders), usually family and friends

• Shares in an Ltd company are available to purchase on stock market

Which of the following are advantages of a Private Limited Company (Ltd)? - Choose THREE answers

• Shareholders have limited liability

• Control of the company is not lost to outsiders

• Profits are shared amongst all shareholders

• More finance can be raised from shareholders and lenders should the business require additional equity

Which THREE of the following features relate to a Public Limited Company (plc)?

• Shares are offered to the general public for sale through the stock exchange

• Run by a Board of Directors who are elected at the Annual General Meeting on behalf of shareholders

• Accounts must be lodged with Registrar of Public Companies and are published

• Shareholders must be invited personally by Board of Directors

Which of the following is NOT a disadvantage of a Public Limited Company (plc)?

• Strictly must obide by the Companies Act

• Have no control over who purchases shares

• Must make annual accounts publically available

• Set up costs are high

• Shareholders have limited liability

Which TWO documents must a plc lodge with Registrar of Companies to form?

• Memorandum of Declaration

• Memorandum of Association

• Articles of Companies

• Articles of Association

Which of the following is NOT a source of finance for a plc?

• Issuing shares

• Debentures

• Grants

• Venture Capital

• Loan from family and friends

Dividends are a share of organisational profits paid to shareholders.

• True

• False

Dividends paid out at the end of the year are called...

• Eventual dividends

• Final dividends

• Interim dividends

• End dividends

Dividends paid during the financial year (usually 6-monthly) are called...

• Final dividends

• Inter dividends

• Interim dividends

• Regular dividends

Which of the following is NOT a feature of an ordinary dividend?

• Most common type of share

• No fixed rate of dividend - depends on profit earned that year

• Receive dividend before preference shareholders have been paid

• Have voting rights at AGM