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    1.4.1 Private Limited Company (LTD)

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    slayygirlyhzh

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    1.4.1 Private Limited Company (LTD)

    Uploaded by

    slayygirlyhzh
    14 views2 pages

    Original Title

    1.4.1 Private limited company (Ltd)

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    © © All Rights Reserved

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    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    14 views2 pages

    1.4.1 Private Limited Company (LTD)

    Uploaded by

    slayygirlyhzh

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Specification Topic: Private limited company (Ltd)

    Q1 Fill in the gaps

    When starting a business, many start-up businesses select a __________ _______________ or a


    partnership as their preferred type of business ______________________. However, other types of
    business ownership exist, such as becoming a _______________ company. Limited companies can
    raise finance by selling _______________. People who buy shares are called
    _____________________, as they own part of the business and are entitled to a share of the
    _________________. This is called a ____________________. Investors are often willing to buy
    shares in limited companies because they benefit from limited __________________.
    The type of limited company that a start-up business can consider when choosing its ownership type
    is a _________________ limited company (Ltd).

    Choose from: shares; ownership; liability; private; dividend; profits; shareholders; limited; sole
    trader

    Q2 Match it! Match the key term to the most relevant statement

    2.1 Ltd a. Payment made to shareholders

    b. A shareholder’s responsibility for the debts of a business is


    2.2 Shareholders
    limited to the amount he/she has invested in the purchase of shares

    2.3 Dividend c. A private limited company

    2.4 Limited Liability d. People who have bought shares in a limited company

    Q3 True or false? Identify if the following statements are true or false

    True False

    3.1 A Ltd has unlimited liability

    3.2 A Ltd does not have to register with Companies House

    3.3 A private limited company cannot offer shares for sale to the general
    public

    3.4 A private limited company has to include the letters Ltd at the end of
    its company name

    3.5 A source of finance available to a private limited company is share


    capital

    © Tutor2u Limited 2017 www.tutor2u.net


    Specification Topic: Private limited company (Ltd)

    Q4 Pro or con? Identify whether each of the following statements is a pro or a con of being a
    private limited company

    Pro Con

    4.1 The business can keep control of who owns shares in the
    business

    4.2 Scope for expansion into a very large business can be


    limited

    4.3 Shareholders have limited liability

    4.4 Accounts are available to the general public at Companies


    House, so financial performance of the business can be seen

    4.5 Shares cannot be offered for sale to the general public, so


    the amount of share capital which can be raised is limited

    4.6 Attracts private investors, as it gives them limited liability

    Q5 Mini case study

    “Happy Holidays” is a caravan park located on the south coast of England that is owned by five
    partners. The park is in need of extensive restoration, which is likely to be very expensive. In
    order to raise the finance required for this restoration, the current owners approached friends
    and family asking them if they wished to become new partners in Happy Holidays. However, all
    of the people asked, refused, explaining that the investment would be “too risky… as if there
    was poor weather during the peak season, the business could fail and the partners would be
    liable for all of the firm’s debts”.
    After reconsidering their options, the original partners decided to convert the business into
    “Happy Holidays Ltd”. After this change of business ownership, the five original owners found
    they had many friends and family that were keen to buy shares in the business.

    5.1 Explain why the friends/family of the original partners were prepared to buy shares in the
    private limited company, but were not interested in becoming partners in the business

    © Tutor2u Limited 2017 www.tutor2u.net

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