Chapter 21: Limited companies

A legal entity which has a separate identity from its shareholders, whose liability for the company’s debts is limited.

• Sole trader

• Partnership

• Limited company

Amount of capital issued to the shareholders.

• Called up capital

• Paid up capital

• Issued share capital

A part of the issued share capital for which payment has been requested from shareholders.

• Issued share capital

• Called up capital

• Paid up capital

A part of the called-up share capital for which the company has received payment from shareholders.

• Issued share capital

• Called up capital

• Paid up capital

Preference shares which must be bought back by the company at an agreed date and for an agreed price.

• Redeemable preference shares

• Non-redeemable preference shares

• Ordinary shares

Total funds provided by the shareholders of the company.

• Equity

• Debenture

• Preference shares

A long-term loan which has a fixed rate of interest, payable irrespective of the profit of the company. It is also known as Loan Notes.

• Equity

• Debenture

• Bank overdraft

_________ are part owners of a limited company. They are people or institutions who hold one or more shares in a company.

• Directors

• Shareholders

• Managers

______ means that the risk or liability that each shareholder bears is limited to the value of the shares they hold.

• Debenture

• Limited liability

• Ordinary share

A unit of investment in a company. These make up the capital of the company. They can have a nominal or face value of $ 0.50, $ 1, $ 10 etc.

• Share

• Dividend

• Debenture