business ownership

• There are 2 different types of companies:

  public limited companies (plcs)

  private limited companies (ltds)

  -both are owned by shareholders and both have limited liability
• Advantages of a private limited company:


  -owners have limited liability

  -improves the status of the business

  -shareholders have to be invited, this protects the business from outside influence

  -if the founder dies, the company still exists and is controlled by the shareholders
• Disadvantages of a private limited company:


  -more paperwork

  -time consuming to set up

  -in some instances, often people are able to view the business's financial information

  -may require outside professional help to manage finances
• Advantages of a public limited company:


  -shares can be sold to the general public so there are more potential investors

  -more media coverage, which is good publicity

  -shares can be bought and sold easily
• disadvantages of a public limited company:


  -negative media coverage can damage their reputation

  -at risk of being taken over as they cannot control who buys their shares

  -more regulation than an ltd which can increase costs

  -shareholders get a vote in the business and may have different objectives than the original owners
• What is a flotation?


  When a private limited company wants to become a public limited company