BUSINESS STUDIES

GRADE : 10TERM 2

TOPIC 4: FORMS OF OWNERSHIP

RESOUESES USED

• PRESENTAION • SLIDES• MINDMAPS• PICTURES

10 CHARECTORISTICS

• Authentic activities have real-world relevance• Authentic activities provide the opportunity for students to

examine the task from different perspectives, using a variety of resources

• Authentic activities provide the opportunity to collaborate• Authentic activities provide the opportunity to reflect• Authentic activities allow competing solutions and

diversity of outcome

Advantages and DisadvantagesLtd• Easier to attract new shareholders due to limited liability• Tend to be smaller, therefore shareholders can be closer to the

business operation• Shareowners usually run the business and look for long term

profit maximisation• Less capital than PLC’s

Plc• More information has to be given out and made public (which can

be costly to prepare)• More rules regarding business practice• Short term share investment discourages enterprise• Can raise large amounts of capital from selling shares• Gives the company prestige.

Private vs publicPrivate: • Have the letters ‘ Ltd’ or the word ‘Limited’ after

their name• Shares are privately owned and can only be sold with

the permission of the shareholders• Generally few shareholders• Generally greater control by the share owners• Lever Brothers Ltd were a private limited companyPublic: • Have the letters ‘plc’ after their name• Shares are openly traded on the Stock Exchange• Generally greater numbers of shareholders• Control is delegated to directors/manages

Partnership• A partnership has between 2 - 20 owners.• The partners have unlimited liability – if

the business goes bankrupt they can lose personal possessions.• Partners share the risks, can both put in

ideas and share the profits.• Disagreements may occur.• A Deed of Partnership is a legal document

which may be drawn up to agree the details of the partnership

test style questions

Question 1

a. What is meant by the term ‘public limited company’? (2)b. Describe two characteristics of a public limited company.

(4)