Private and Public Limited Companies

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Presentation transcript:

Private and Public Limited Companies

Objectives Pupils will know the features of Private Limited Companies (C) Pupils will know the features of Public Pupils will know why the number of limited companies have changed (A)

Legal Structures of a business Watch the following video about the different type of business structures. Think about which type of structure you would start a business of your own as.

How do we know a limited company? Owned by shareholders Limited liability Public limited (Plc) Must let customers know Private limited (Ltd) incorporated

Board of directors All limited companies Directors elected by shareholders Elected at AGM (Annual General Meeting) Make important decisions and run company Chair of board – responsible for way board run Managing director – Overall running of company

Private Limited Company (Ltd) An incorporated business structure owned by shareholders. Shares may be sold, but to family and friends of the owner only. The shareholders (owners) have limited liability.

Advantages and disadvantages Ltd Task 2.5.1

Public Limited Company (plc) An incorporated business structure owned by shareholders. Shares are traded on the stock exchange to members of the public. The shareholders have limited liability.

Public limited companies Traded on stock exchange Dividends to shareholders Start-up shares £50,000 Used to raise money

Shareholders Minority shareholders – private individuals (small number shares) Major shareholders – banks / investment companies (large number shares) Shares up/down Economy doing well Future looks good Takeover bid Value rising

Advantages and disadvantages plc Task 2.5.2

Registered in Great Britain Type of business organisation Number of companies 2000 2008 Public Limited 15,181 11,905 Private Limited 1,619,500 2,700,851 Why increased? Merger or takeover New companies Change country Go out of business Changing business type

Video Watch the video about the established businesses and the journey they go through to fund themselves and operate successfully.

Review Task Complete the features worksheet. Extension: A sole trader is rapidly expanding, evaluate the most suitable business structure for this sole trader to now adopt. Consider all of sole traders, partnerships, ltd’s and plc’s Look at all advantages and disadvantages Give a recommendation with reasons