Private Limited Companies ‘LTD’

, 2013Year 10 Business Studies

What do YOU see?

Learning Objectives

£ To know what ‘LTD’ stands for££ To explain 2 advantages and 2

disadvantages of being a ‘LTD’£££ To discuss how a ‘LTD’ is set up

Business Ownership so far…

1) Joe the Window Cleaner2) Partnerships3) McDonalds

Next type of ownership suitable for an entrepreneur…to become a ‘LTD’

What is an ‘LTD’? Burrs LTD

Imagine….your wildest dreams come true…Miss B leaves teaching to set up her own business…cake bakingNo to Sole Trader, Partnership and FranchiseDoesn’t like the idea of ‘Unlimited Liability’At the same time, she wants her business to expand in the future…she will need a lot of financeShe reckons she has some wealthy family who could be persuaded to invest in her company for a share of any future profitsLimit the risk to her investors…also known as….?Limited Liability – means they would only lose what money they put into her company

Who owns a private LTD company?

Shareholders, BUTShares in a private limited company are not available to general publicShares can be a way of raising capital

Creating a Private LTD Company

Business goes through a process called Incorporation to gain LIMITED LIABILITY.http://www.companieshouse.gov.uk/ Business = Company, which will have a separate legal identity, i.e. if Miss Burr dies, her company can still be sued in court and remain in existence.Prove to the authorities (Government and Companies House) the business is operating properly and is secure.

Examples of Private Limited Companies

Bennetts Funerals Directors Ltd

Hearing Solutions Limited

CVS International Ltd http://www.cvsinternational.co.uk/

Limited Liability

All shareholders have limited liabilityWhat is limited liability?Who are the owners?

Should we be an LTD?

What are dividends?

A dividend is what the shareholder receives from the companies profitsThe more money an individual puts in, the more dividend they receiveBUT, the company may decide not to pay a dividend and keep the profits in the business

Plenary Activity

GOOD spelling and punctuation are important in buisness!

Why?READ through the paragraph of text about

why spelling and punctuation are important in business – try to SPOT all

the mistakes!