Define the term 'share capital'.

Mark scheme

Marking points from the official mark scheme (May/June 2017). The mark or mark type is shown in brackets.

1. [2] Share capital is the total value of capital/finance raised from shareholders through the issue of shares or capital used by shareholders to buy shares in a plc.
2. [1] Advantage: free money-an attractive financial consideration
3. [1] Advantage: good for businesses unable to afford or get a loan
4. [1] Advantage: gives confidence to banks and investors
5. [1] Advantage: important complement to existing funds
6. [1] Advantage: validates the efficacy of your business
7. [1] Advantage: easier to get more grants once awarded one
8. [1] Disadvantage: may be difficult to get
9. [1] Disadvantage: eligibility criteria too demanding
10. [1] Disadvantage: may be too small/insufficient for needs, matching funds
11. [1] Disadvantage: may have too stringent conditions attached
12. [1] Disadvantage: may be too much red tape involved/slow
13. [1] Disadvantage: too much detailed information required
14. [1] Disadvantage: too much detailed control and monitoring of grant use
15. [1] Disadvantage: may become too reliant on grant funding
16. [1] Disadvantage: may be used unwisely