2. 1. A sole trader may become a
___________________________ in order
to obtain enough new finance to
expand his business.
3. 2. A partnership which is looking
to expand may decide to become
a ___________________ _____________
______________________ when new
owners join the business - called
_____________________________________.
In a Ltd company the shareholders
are family and friends.
4. 3. Only a ________________ ________________
________________________ can raise capital
by selling shares to the general public
on the Stock Exchange. The major
benefit of becoming either a Ltd or PLC
is __________________ _____________________
i.e. shareholders only stand to lose the
value of their investment should the
business fail (and not their personal
belongings/savings which could happen
to a partnership/sole trader who gets in
debt).
5. 4. These shareholders who
invest their money to buy
shares in a company will
receive financial rewards
from the company (if it makes
_____________________) in the
form of _______________________.
6. 5. If the company only makes a little
profit, _____________________
shareholders may not receive any
dividend at all.
This is because _________________________
shareholders have the right to receive
any dividends first. However because
of this greater ___________, ordinary
shareholders can expect higher
dividends if the company is very
profitable
7. 6. ________________________________
holders are individuals who loan
money to a business.
The loan agreement states how
much interest they are due from
the business before any
dividends to ordinary and
preference shareholders are
paid.
8. At an agreed date, these
debentures are ____________________
in full.
Only _______________ _______________
_____________________ can raise
extra capital from issuing
debentures.
12. Factoring
• “Selling” the invoices you
have issued to customers
to a “factor” - saves waiting
for payment
13. Grant
• Money which is gifted to a
company which meets certain
criteria e.g. located in area of
deprivation
• Does not need to be paid back
14. Retained Profits
• Like company “savings” from
profits of previous year(s)
• Does not need to be paid back
and can be accessed quickly
15.
16. Bank Loan
• Company borrows money from a bank
and agrees to repay it over a period of
months/years
• Advantage - instalments are spread over
a period of time
• Disadvantage – banks may refuse to lend
if no ‘security’ (collateral) is given
17. Leasing
• Similar to renting an asset e.g.
van, machinery or premises
• Monthly payments made to the
owner of asset
• Saves company having to pay
the full purchase price outright
18. Hire Purchase
• Similar to leasing however
monthly payments are higher
AND the asset will eventually be
owned by the business
20. Share Issue
• Only suitable for a private limited
company (Ltd) to sell to selected
family or friends OR for a public
limited company (PLC) to sell to the
general public on the Stock Market
• Another disadvantage is that it dilutes
ownership and control
• Shareholders also expect dividends
regularly
21. Debentures
• Only for PLCs
• Debenture holders are NOT
shareholders therefore have no
voting rights
22. Venture Capital
• Major advantage is that they are
prepared to invest in more riskier
businesses
• However dilutes ownership
23. 1. A sole trader may become a
___________________________ in order
to obtain enough new finance to
expand his business.
partnership
24. 2. A partnership which is looking
to expand may decide to become
a ___________________ _____________
______________________ when new
owners join the business - called
_____________________________________.
In a Ltd company the shareholders
are family and friends.
private
company
shareholders
limited
25. 3. Only a ________________ ________________
________________________ can raise capital
by selling shares to the general public
on the Stock Exchange. The major
benefit of becoming either a Ltd or PLC
is __________________ _____________________
i.e. shareholders only stand to lose the
value of their investment should the
business fail (and not their personal
belongings/savings which could happen
to a partnership/sole trader who gets in
debt).
liabilitylimited
company
limitedpublic
26. 4. These shareholders who
invest their money to buy
shares in a company will
receive financial rewards
from the company (if it makes
_____________________) in the
form of _______________________.
a profit
dividends
27. 5. If the company only makes a little
profit, _____________________
shareholders may not receive any
dividend at all.
This is because _________________________
shareholders have the right to receive
any dividends first. However because
of this greater ___________, ordinary
shareholders can expect higher
dividends if the company is very
profitable
ordinary
preference
risk
28. 6. ________________________________
holders are individuals who loan
money to a business.
The loan agreement states how
much interest they are due from
the business before any
dividends to ordinary and
preference shareholders are
paid.
Debenture
29. At an agreed date, these
debentures are ____________________
in full.
Only _______________ _______________
_____________________ can raise
extra capital from issuing
debentures.
companies
limitedpublic
repaid
