1. Choosing the right legal structure for the business GCSE Business studies Unit 2 Topic 6

2. Company Act 1980 PLC- Public limited company Can sell shares on the stock exchange (aka quoted) Must have share capital of £50,000 Anyone can be a shareholder (competitors) LTD- Private limited company Cannot publicly advertise its shares Owners can restrict WHO owns part of their company Family and friends

3. Advantages 1. Can advertise shares to general public 2. Higher number of potential customers 3. Raise larger sums of money 4. More media coverage because more shareholders (cheap publicity) 5. Usually bigger companies and this impresses shareholders 6. Easier to sell shares so investors willing to buy, possibly sell later

4. Disadvantages 1. Media coverage may be bad 2. Competitor may buy firm 3. No control over share ownership 4. More regulations on a PLC compared to a LTD (added expenses) 5. Competitors may find it easier to find out information about the firm 6. Mixed views of investors, may conflict with owners

5. The Story So Far… In your books You need to draw the evolution of a sole trader-partnership-company- LTD/PLC Sole trader Company