Sandra Hobson is a law student at the University of Chatsworth. She has just attended a lecture on company law. Here are her notes about private limited companies and public limited companies. Read Sandra’s notes and find the words or phrases in the notes that match each of the meanings on the next page.
My notes - company lecture
Private limited and public limited companies
The governing legislation is the Companies Act 2006. All companies are registered at Companies House, which is the central registry of companies in the UK. Companies are incorporated businesses.
A company is a legal entity. It has its own legal personality.
Companies must disclose certain information. Each year, every company must file its financial accounts and Annual Return to Companies House. The financial accounts include a balance sheet and a profit and loss account. The annual Return contains up-to-date information about that company.
The owners of a company are known as the members, or shareholders.
Shareholders have limited liability. They will not be liable for the company debts with their own assets. Companies pay corporation tax; employees pay income tax.
Companies must follow lots of rules and regulations.
Every company has a memorandum and articles of association.
The business of a company is run by the directors.
The shareholders may receive a dividend if the company makes profit.
Private limited company
The name of a private limited company must end with the words “Limited” or the abbreviation “Ltd”.
A private limited company must have a minimum of one director. It is possible (and common) to have a single-member company, with only one shareholder.
No minimum share capital is required to set up a private limited company.
The agreement of existing shareholders is needed to issue new shares or buy or sell existing shares.
Public limited company
The name of public limited company must end with the abbreviation “plc”.
A public limited company must have a minimum of two directors and a company secretary.
It is not possible to have a single-member public limited company. A public limited company can be a listed company or unlisted. If listed, the company shares can be bought or sold on the Stock Exchange or Alternative Investment Market (AIM), often through a stockbroker. A stockbroker deals in shares.
A minimum of £50,000 share capital is currently required to start a public limited company.
A
These are businesses which have been formally set up and registered as companies.
Answer:
B
This is something that exists in the eyes of the law. It is a legal “being”, and can be a person or a company.
Answer:
C
This means “to make public”, to tell someone, or reveal to.
Answer:
D
This is another name for the shareholders of the company.
Answer:
E
This means that the shareholders will not lose more than their investment in the company. They will have to pay any amount that they still owe to the company for their shares, but no more.
Answer:
F
This is the name of the tax that a company has to pay.
Answer:
G
These are the people who are responsible for the day-to-day management and running of the company.
Answer:
H
This is a payment of a company’s profits to the shareholders of the company.
Answer:
I
This is the person who must make sure that all the statutory regulations regarding a company are followed.
Answer:
J
This is a company that has just one shareholder.
Answer:
K
This is the amount of money that represents the value of a company’s shares.
Answer:
Answers
- incorporated businesses
- legal entity
- disclose
- members
- limited liability
- corporation tax
- income tax
- directors
- dividend
- company secretary
- single-member company
- share capital
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