Complete the text “Investing in a Limited Company” with the words from the box.

Date: 2015-10-07; view: 475.

There are five main types of legally constituted company. Each type of company has different characteristics. Tick the correct characteristics for each business type, or write “possibly” if the characteristic could apply.

When a limited company has started trading, you do not invest in (1)________ by giving more capital to the company. You buy them from one of the shareholders. If it is a private limited company, shares can be bought and sold (2)_______, usually at a Stock Exchange. If the company is doing well and paying high (3)______, then you might pay less than the (4)______ value of the shares. If it is doing badly, you might pay less than the face value of the shares. The price you pay at the Stock Exchange (or to a shareholder) for your shares in their (5) ______ value.

If the company fails, it will stop trading and go into (6)______. This means that all the company's property and equipment (its assets) must be sold and the money from the sale will be used to pay its debts to its (7)_______. The shareholders may lose the money they paid for the shares. If the company still does not have enough money to pay all its (8)______, the shareholders do not have to pay any more money. In other words, the shareholders' (9)_______ for debts is limited to the value of their shares.

On the other hand, if you are an owner of a business, which is not (10)______, for example a sole proprietorship (owned by one person) or a partnership (owned by between 2 and 20 people) and your business fails, you will go (11)______. In this case you might have to sell your own private possessions (your house, car, furniture etc.) to pay all your creditors. In other words, sole proprietors and partners have (12)______liability for their firm's debts.