LucyArts Ltd is an art shop in Stafford.
Which ONE of the following is a reason why Lucy set up LucyArts Ltd as a private limited company?
Select ONE answer:
- would have unlimited liability
- could guarantee that the business would make a profit
- would have the opportunity to raise finance by selling shares
- could raise money on the stock exchange
Show the workings to arrive at your answer, and explain and justify your reasons:
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This multiple choice question is suitable for Business Studies KS4 & KS3 classes
The answer is 3
- becoming private gives you limited liability which is better than unlimited.
- does not guarantee that the business makes a profit.
- Correct – a private company can invite people to buy shares in the business.
- private limited cannot raise money on the stock exchange.
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