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18 Cards in this Set
- Front
- Back
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Limited Liability
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Shareholders are only liable up to the value of their shares
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Shares
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Issued at nominal or par value. Value rises if business is more profitable
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Dividends
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Share of profits paid out to share holders Interim - Half way through the year Final - at year end |
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Ordinary Shares
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Only paid if there is money left after paying preference share holders. Vary depending on profits. Sold through stock exchange. More risky but may end up with higher dividend
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Preference Shares
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Paid before ordinary shares. Fixed percentage return. Not gauranteed to be paid. May be redeemable (bought back)
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Legal Requirement of PLC
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Must have a Memorandum of Association and Article of Association
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Memorandum of Association
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Address of Company, Type of Business, Authorised Equity, What liabiltiy is limited
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Article of Association
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Production and Audit of accounts. Dividends/Rights of shareholders, Directors, Duties + Renomeration, Holding of Meetings.
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Board of Directors
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Elected by Shareholders. Hold AGM. Directors elect a chairman
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Appropriation Account
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Profit + Unappropriated profit from the previous years. Less Dividends + transfers to reserves = Unappropriated Profit |
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Statement of Finacial Position
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Non-Current Assets + Current Assets - Current Liabilities - Non-Current Liabilities = Unappropriated Profit
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Debentures
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Long Term loan to the company. Interest paid yearly. Paid before dividends. Usually secured against specific assets. Rate of Interest fixed
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Issued share equity
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Amount raised by issue of shares
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Reserves
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Shown in SOFP. Unappropriated profit, Share premium, Revaluation Reserve, General Reserve
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Share Premium Reserves
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Difference between issue price and nominal value of shares. Can not be used to pay dividends. Can be used to write off Goodwill
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Provisions for Tax
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Work out tax payable - current liabilities and take it off profit for the year
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Preliminary Expenses
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Expenses involved in setting up the business eg. incorporation of company or memorandum of association. Long term benefits shown as intangible assets. Usually written off over a number of years
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Investments
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Shares in another company. Shown as historic cost in SOFP but market value is indicated
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