Test Bank Complete_ Understanding Business 2024
Release By William Nickels, Jim McHugh and Susan
McHugh | All Chapters 1-20| All Chapters With Correct
Answer Key| Graded A+
what is a private limited company - ANSWERa private limited company (ltd) is a
company whose shares are owned privately (ie not available to the public stock
market): it has a minimum of one shareholder.
it is owned by the shareholders and run by a director or a hoard of directors: they
tend to be family businesses, such as Mackays Stores Ltd or Baxters Food Group Ltd.
what are the advantages of a private limited company - ANSWER-shareholders have
limited liability
-control of company not lost to outsiders
-more finance can be raised from shareholders and lenders
-significant experience and expertise from shareholders and directors
what are the disadvantages of a private limited company - ANSWER-profits are
shared amongst the people
-there is, as with a partnership, a legal process in setting up the company
-shares cannot be sold to the public, meaning raising finance is more difficult than
for a public limited company
-firm has to abide by the requirements of the Companies Act
-Scottish based firms must provide Companies House in Edninurgh with a copy of the
annual accounts, which are then available to anyone who requests a copy
from where does a private limited company get it's finance - ANSWER-company
profits from previous years
-inviting a new shareholder
-bank loan
-bank overdraft
-government grants
-trade credit
-debt factoring
what are the objectives of a private limited company - ANSWER-maximise profits
-to grow
-have a strong status
-have highest possible sales revenue
what is a public limited company - ANSWERshares are available for purchase on the
stock market- must be a minimum of two shareholders and £50,000 share capital.
shareholders own a plc, whilst a shareholders own a plc. BT, vodafone, stagecoach
and Celtic FC are examples of plcs
, what are the advantages of a public limited company - ANSWER-huge amounts of
finance can be raised
-plcs often dominate their markets
-easy to borrow money from lenders due to their large size
what are the disadvantages of a public limited company - ANSWER-set up costs of
company may be high
-must abide by the companies act
-no control over who buys the shares
-must publish annual accounts
where does a public limited company get it's finance - ANSWER-company profits
from previous years
-selling shares to public
-bank loans
-bank overdraft
-issue debentures
-government grants
-trade credits
-debt factoring
what are the objectives of a public limited company - ANSWER-maximise profits
-expand output
-grow
-have higher sales revenue than in previous years
-dominate the market
-have a strong image
what is a franchise - ANSWERbusiness run by one firm under the name of another-
the franchiser gives the franchisee a licence permitting them to sell goods or services
under the franchisers brand name, usually in return for a share of the franchisee's
profit. can use franchisers name, publicity materials, decor, uniforms, etc. examples-
McDonald's, dominos, British school of motoring
advantages of a franchise - ANSWER-quick way to enter new geographical markets
(franchiser)
-new business can begin trading on established reputation
-franchise has advantage of a well known brand name
-benefit from other ideas eg) egg mcmuffin
disadvantages of a franchise - ANSWER-reliant upon person running business to
maintain image and 'good name' (franchiser)
-percentage of profits has to be paid to franchiser
-franchiser may impose strict rules restricting new initiative
-reputation will depend in part on franchiser and other franchisers
Release By William Nickels, Jim McHugh and Susan
McHugh | All Chapters 1-20| All Chapters With Correct
Answer Key| Graded A+
what is a private limited company - ANSWERa private limited company (ltd) is a
company whose shares are owned privately (ie not available to the public stock
market): it has a minimum of one shareholder.
it is owned by the shareholders and run by a director or a hoard of directors: they
tend to be family businesses, such as Mackays Stores Ltd or Baxters Food Group Ltd.
what are the advantages of a private limited company - ANSWER-shareholders have
limited liability
-control of company not lost to outsiders
-more finance can be raised from shareholders and lenders
-significant experience and expertise from shareholders and directors
what are the disadvantages of a private limited company - ANSWER-profits are
shared amongst the people
-there is, as with a partnership, a legal process in setting up the company
-shares cannot be sold to the public, meaning raising finance is more difficult than
for a public limited company
-firm has to abide by the requirements of the Companies Act
-Scottish based firms must provide Companies House in Edninurgh with a copy of the
annual accounts, which are then available to anyone who requests a copy
from where does a private limited company get it's finance - ANSWER-company
profits from previous years
-inviting a new shareholder
-bank loan
-bank overdraft
-government grants
-trade credit
-debt factoring
what are the objectives of a private limited company - ANSWER-maximise profits
-to grow
-have a strong status
-have highest possible sales revenue
what is a public limited company - ANSWERshares are available for purchase on the
stock market- must be a minimum of two shareholders and £50,000 share capital.
shareholders own a plc, whilst a shareholders own a plc. BT, vodafone, stagecoach
and Celtic FC are examples of plcs
, what are the advantages of a public limited company - ANSWER-huge amounts of
finance can be raised
-plcs often dominate their markets
-easy to borrow money from lenders due to their large size
what are the disadvantages of a public limited company - ANSWER-set up costs of
company may be high
-must abide by the companies act
-no control over who buys the shares
-must publish annual accounts
where does a public limited company get it's finance - ANSWER-company profits
from previous years
-selling shares to public
-bank loans
-bank overdraft
-issue debentures
-government grants
-trade credits
-debt factoring
what are the objectives of a public limited company - ANSWER-maximise profits
-expand output
-grow
-have higher sales revenue than in previous years
-dominate the market
-have a strong image
what is a franchise - ANSWERbusiness run by one firm under the name of another-
the franchiser gives the franchisee a licence permitting them to sell goods or services
under the franchisers brand name, usually in return for a share of the franchisee's
profit. can use franchisers name, publicity materials, decor, uniforms, etc. examples-
McDonald's, dominos, British school of motoring
advantages of a franchise - ANSWER-quick way to enter new geographical markets
(franchiser)
-new business can begin trading on established reputation
-franchise has advantage of a well known brand name
-benefit from other ideas eg) egg mcmuffin
disadvantages of a franchise - ANSWER-reliant upon person running business to
maintain image and 'good name' (franchiser)
-percentage of profits has to be paid to franchiser
-franchiser may impose strict rules restricting new initiative
-reputation will depend in part on franchiser and other franchisers
