Private vs Public Limited Companies

A person or organisation who owns shares in a limited company is called...

• limited liability

• dividend

• shareholder

• limited company

If an unincorporated business fails, then the owners might have to use their personal wealth to finance any business debts.

• unlimited liability

• limited liability

• unincorporated business

• incorporate business

What would shareholders get in return for investing their money in a business?

• capital

• debt

• dividend

• obligation

What is the disadvantage of being a Plc?

• If the business fails and has debts, the shareholders need to pay all of the debts as well

• Difficult to generate more capital from selling the shares

• The legal formalities of setting up a Plc are very costly

• The shares cannot be sold or transferred to anyone else without the agreement of the other shareholders

Which of the following is NOT the advantage of an Ltd?

• Although the process to establish one is more complicated than a sole trader, it is relatively easier compared to a Plc

• The risk of being taken over by another company is generally lower as the shares are not offered to the public.

• There is no restriction on the buying, selling or transfer of shares

• Original shareholders can keep control of their business as long as they do not sell too many shares to other people

Alphabet Inc. is an American multinational technology conglomerate holding company headquartered in Mountain View, California. They did an IPO in 2004. That means Alphabet Inc is an...

(the answer is more than 1)

• incorporated business

• unincorporated business

• public limited company

• private limited company

A legal requirement for all companies in which shareholders may attend and vote on who they want to be on the Board of Directors for the coming year.

• Dividends

• Annual General Meeting

• Shareholders

• Initial Public Offering

What is the biggest difference between private and public limited companies?

• Ltd is unlimited liability, but the Plc is a limited liability

• You cannot sell your shares to the public if you are an Ltd, but you can if you are a Plc

• Plc is an unincorporated business, but Ltd is an incorporated business

• The share price of a Plc company is way much more valuable than an Ltd company