Quiz on Limited Companies

What is a limited company?

• A non-profit organization

• A business owned by a group of people

• A government-owned entity

• A business owned by a single person

What are the owners of a limited company called?

• Managers

• Employees

• Directors

• Shareholders

What is the main advantage of a limited company?

• No legal requirements

• Limited liability

• Higher taxes

• Unlimited liability

Which type of shares are paid dividends first?

• Redeemable preference shares

• Preference shares

• Ordinary shares

• Non-redeemable preference shares

What is a dividend?

• A tax on profits

• A payment made to shareholders

• A legal requirement

• A type of loan

What is the capital structure of a limited company primarily composed of?

• Only loans

• Only equity

• Equity and debt

• Debentures and loans

What is the difference between share capital and loan capital?

• Loan capital is only for public companies

• Loan capital is raised by issuing shares

• Share capital is borrowed money

• Share capital is raised by issuing shares

What is the main source of finance for limited companies?

• Loans from banks

• Ordinary shares

• Government grants

• Personal savings

Which of the following statements is true about debentures?

• They are paid after dividends

• They allow voting rights

• They are part of the equity of a company

• They carry a fixed rate of interest