Edexcel Business A Level Revision

Public limited company - (INCORPORATED) A public limited company ('PLC') is a company that is able to offer its shares to the public . They don't have to offer those shares to the public, but they can. When shares are publicly traded on the public stock market, Plc companies have substantially more shareholders. Public companies are subject to significantly greater regulation in terms of public disclosure of financial records and other information ADVANTAGES Have limited liability Can easily raise capital by selling shares on the stock exchange, more people to buy them. The increased capital allows company to grow and diversify. The status of company increased, banks more willing to lend. DISADVANTAGES The shareholders own company but directors control it, ‘divorce of ownership and control’ – the directors may make decisions that don’t directly benefit the shareholders, this can create disagreements. There is always threat that someone will buy enough shares...

Unincorporated - A business that does not possess a separate legal identity from its owner(s). The owner(s) bear full liability for any action or inaction of the business : they may sue and be sued for business activity or inactivity. The owner is the business. Most unincorporated businesses operate as sole traders. Incorporated - means owners have their own legal identity and have limited liability. Most incorporated businesses operate as Ltd. Unlimited Liability - business owners are personally liable for all business debts if the business can't pay its liabilities . Only unincorporated businesses have unlimited liability. If the unincorporated business fails, the owners are liable for the amounts owed.   Limited Liability - the condition by which shareholders are not liable for any debts owed by the company. They only lose the money that they have invested in the business in the form of shares. Can own things itself (assets), can sue and be sued. Companies are owned ...

Business angels -   Usually high-net worth individuals who invest either directly or via network syndicates into start-up businesses in return for a share of the business i.e. percentage equity. Can be seen as high risk as the business is not established but angels will assess the potential for reward. The entrepreneur will need to demonstrate a good understanding of their business model and present a detailed business plan in order to secure the investment. BUSINESS ANGELS MAY ALSO OFFER SUPPORT AND EXPERTISE , ADVANTAGES OF BUSINESS ANGELS They are normally very knowledgeable and experienced in business matters; may act as a mentor for the business, providing advice and guidance. DISADVANTAGES OF BUSINESS ANGELS May require some form of equity (share) which gives them a measure of control. BEST FOR .... newer and possibly high risk, early stage or high growth business.