Explain why a business might remain a private limited company rather than change to a public limited company.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2020). The mark or mark type is shown in brackets.

1. [X] A definition of a private limited company might be given (e.g., small/medium sized, owned by shareholders, often family-owned, unable to sell shares to the general public).
2. [X] Concern not to lose control by the current management team.
3. [X] Desire to retain distinctive values and culture.
4. [X] Existing sources of finance (e.g., venture capitalists), negating the need to go public.
5. [X] Shareholders more willing to invest and postpone dividend payments.
6. [X] Business may not be ready to float (e.g., making losses).
7. [X] May have limited aspirations.
8. [X] Avoidance of the expense and hassle of going public.
9. [X] Avoidance of expense and scrutiny (e.g., publishing accounts).
10. [X] Accept any other valid response.
11. [4-5] Effective explanation of why a business might remain as a private limited company rather than change to a public limited company.
12. [2-3] Limited explanation of why a business might remain as a private limited company rather than change to a public limited company.
13. [1] Understanding of a private limited company.