Module 3 Flashcards
(21 cards)
What are advantages/disadvantages of a sole trader?
Ad - you are your own boss You gain all profit Personal attention Decision making is quick More motivated
Dis - no back up Unlimited liability Limited ideas Time off = business stops functioning Employes at own risk
What is a sole trader?
A one person business.
Stationer, grocer.
What is a company?
An ownership split into shares
Define a private limited company
Directors appointed by shareholders on polices of the company
What is a partnership ?
A business run by 2-20 people
advantages/disadvantages of a partnership?
Ad - shared responsibility
Limited liability
More money from other partners
Dis - disagreement
Decisions take longer
Partner dies = business stalled until things are sorted out
advantages/disadvantages of a private limited company?
Ad - limited liability to shareholders
The SH don’t need to worry about the business or being replaced
Company has a separate legal identity
Dis - info about company has to be public
AGM has to be held each year
Can’t sell shares on stock exchange
Profits can be taxed twice
Original owners may lose control of the company
What is a public limited company ?
A company where anyone can buy a share or even re sell to anyone.
advantages/disadvantages of a public limited company?
Ad - can advertise its shares
Sell shares on stock exchange
Dis - expensive to form
Original owners may lose control
SH often don’t attend AGM
become so big creates management problems
What are preference shares ?
First to get paid
Fixed dividend
Lower risk
What are ordinary shares?
Carry most risk
No limit to how much they can get paid
Elect board of directors
What is the memorandum?
Contains authorised share capital and objectives of the company
What are articles of association ?
Number of directors and how profit will be distributed
How is a limited liability company formed?
Open a bank account with money that will be temporarily frozen
Register with the registrar of companies producing evidence
A certificate of incorporation will be issued (can start business)
(PLC has more steps)
Shares are issued by the company
Registrar of companies issues the trading certificate
What are multi nationals?
Companies that have brunches in different countries.
What is a holding company?
A company that is in control of other companies cause it owns the majority of shares of these companies.
What are co - operatives?
Where the owners are the workers
What is a public corporation ?
Owned by the government, are nationalised
What is a franchise ?
Business that pays for the privilege to be granted the license to use the name and logo of the mother company and sell its product.
What will the franchiser do ?
Get a share of the profits and supply the franchise with ‘raw’ materials.
Publically owned companies in Malta
Lombard bank
HSBC Malta
Malta international airport
