Company Types
What are the two main types of companies based on share trading availability?
Public & Private
Who owns the shares in a privately held company?
Friends, family, associates
What is one financial advantage of being a publicly held company?
Easier to raise capital
What legal document outlines how a company will be internally organized?
Articles of Association
What is one major benefit of limited liability?
Reduced investor risk
What does “going public” mean for a business?
Starts selling shares publicly
In a public company, what risk do original owners face regarding control of the business?
Takeovers
Why is access to capital more limited for PLHCs compared to publicly held companies?
No public share selling
What agency in Uruguay issues the RUT for both types of companies?
DGI
Why do PLHCs have more stability than partnerships?
Company survives ownership change (continuity)
Give two characteristics that distinguish a company from a sole trader or a partnership.
Limited liability, continuity
True or False: Shareholders in both public and private companies are personally liable for debts.
False
What type of report must a PLHC often produce for shareholders each year?
Audited annual report
What is one reason companies in Uruguay must register with the DGI?
Tax compliance
Name a disadvantage of public companies regarding privacy.
Which type of company has its shares listed on stock exchanges?
Publicly held
What is limited liability and why is it important for investors?
Loss limited to investment
How does stock market volatility affect a public company differently from a private one?
Public is affected, private isn't
What document shows the external business goals and required capital of a company?
Memorandum of Association
Name one reason starting a company can be expensive.
Legal & administrative fees
Explain the trade-off involved when a company becomes publicly held.
Gets capital, loses control
How can a PLHC raise funds without losing as much control as a publicly held company might?
Name one method a privately held company can use to raise capital apart from going public.
Loans or private equity
Name two ongoing legal obligations publicly held companies must meet that PLHCs usually don’t.
Financial reports, transparency
Why is growth potential usually higher in public companies?
More funding options