GCSE-ready- Home
- Lessons
- GCSE & IGCSE Business
- Limited companies and public corporations
Limited companies and public corporations
🎬 The doodle video for this lesson is coming soon. Subscribe on YouTube to see it first.
Beyond sole traders and partnerships, businesses can be private or public limited companies, or owned by the government.
Limited companies
Owned by shareholders, run by directors, and the company has limited liability.
Private limited company (Ltd): shares are not sold to the general public; often family-owned. Owners keep control.
Public limited company (plc): shares are sold to the public on a stock exchange. Can raise huge sums, but must publish accounts and owners can lose control.
In a large plc, ownership (shareholders) and control (directors and managers) are often separate.
Private limited company (Ltd): shares are not sold to the general public; often family-owned. Owners keep control.
Public limited company (plc): shares are sold to the public on a stock exchange. Can raise huge sums, but must publish accounts and owners can lose control.
In a large plc, ownership (shareholders) and control (directors and managers) are often separate.
Public corporations
A public corporation is a business owned and controlled by the government (in the public sector), such as the BBC in the UK.
Reasons for: provide essential services everyone needs, protect jobs, and avoid a private monopoly charging high prices.
Reasons against: may be inefficient without a profit motive, and losses are paid for by taxpayers.
Reasons for: provide essential services everyone needs, protect jobs, and avoid a private monopoly charging high prices.
Reasons against: may be inefficient without a profit motive, and losses are paid for by taxpayers.
Comparing the forms
A family bakery with 30 shops wants to stay in family control but have limited liability. Which form suits it?
- It wants limited liability.
- It does not want shares sold to the public.
Answer: A private limited company (Ltd)
Ltd: limited liability, shares not sold to the public. Plc: shares sold on a stock exchange, ownership and control often separate. Public corporations are government-owned to provide essential services.
The interactive lesson includes the diagrams for this topic.
Check you have got it
Answer 7 quick questions with instant marking. If you get one wrong, GCSE-ready shows you why and gives you another go. It is free, and you do not need an account.