The UK Business Banking Sector Flashcards Preview

LIBF - Certificate in Business Banking and Conduct > The UK Business Banking Sector > Flashcards

Flashcards in The UK Business Banking Sector Deck (23)
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1
Q

What is a bank?

A

A bank is a financial establishment that uses money deposited by customers for investment, pays out when required, makes loans at interest, facilitates payments and exchanges currency

2
Q

What are banks activities divided into?

A
Retail banking
Business banking 
Corporate banking
Large corporate and global banking 
Private banking
Investment banking
3
Q

What’s a small business defined as?

A
<50 employees
AND
(Annual turnover sub €10m
OR
Balance sheet sub €10m)
4
Q

What’s a medium business defined as?

A
<250 employees 
AND
(Annual turnover sub €50m
OR
Balance sheet sub €43m)
5
Q

What’s a micro business defined as?

A
<10 employees
AND
(Annual turnover sub €2m
OR
Balance sheet sub €2m)
6
Q

What different business structures are there?

A
Sole traders 
Partnerships
Private limited companies
Public limited companies 
Limited liability partnerships (LLPs)
Other non-personal accounts, including charities and not-for-profit orgs
7
Q

Advantages of sole trader

A

Independent and responsible for their own decisions
Easy to set up
All profits go to owner
No annual returns are required

8
Q

Disadvantages of sole trader

A

Owner is personally liable for all debts
Pay tax on what the business makes, not what they take out
Difficult getting credit from certain suppliers as little info in public domain
Problems arise if owner is ill or absent
Owner dies then the business dies

9
Q

Advantages of a partnership

A

Easy to set up
Partners taxed as individuals not as a business entity
Partners share cost of setting up business

10
Q

Disadvantages of partnership

A

Partners are personally liable for partnership debts
Repayment of debt is on a joint and several basis
Complications can arise in the event of serious disagreement or untimely death of partner

11
Q

Key documents for limited companies

A

Certificate of Incorporation
Memorandum of Association
Articles of Association

12
Q

Penalties for late filing of annual returns less than a month

A

£150 private Ltd.

£750 public Ltd.

13
Q

Penalties for late filing of annual returns

1 month- 3 months

A

£375 private Ltd.

£1500 public Ltd.

14
Q

Penalties for late filing of annual returns

3 months - 6 months

A

£750 private Ltd.

£3000 public Ltd.

15
Q

Penalties for late filing of annual returns

6 months

A

£1500 private Ltd.

£7500 public Ltd.

16
Q

Penalties for late filing of tax returns

1 day

A

£100

17
Q

Penalties for late filing of tax returns

3 months

A

£200

18
Q

Penalties for late filing of tax returns

6 months

A

HMRC will estimate corporation tax due and add a penalty of 10%

19
Q

Penalties for late filing of tax returns

12 months

A

Another 10% of any unpaid tax

20
Q

Advantages of limited companies

A

Limited liability
Sperate legal entity - the company may exist beyond the life of its members
Taxation - only taxes on profits

21
Q

Disadvantages of limited companies

A

Financial audited accounts - more complex and restrictive rules governing the accounts
Restricted capital raising

22
Q

Advantages of limited liability partnerships

A

LLP former establishes limited liability for its members
Members are taxed as individuals
LLP continues in the event of death of a member

23
Q

Disadvantages of LLP

A

LLP is more formal and costly to run
Complications can arise in event of a serious disagreement
Info about the business is on the public domain