• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Roles of Banks and Building societies.

Extracts from this document...

Introduction

´╗┐Ali Raza Unit 4 Finance for business Task 1 Introduction: in this task I am going to give some definitions and examples about some topics in finance in business. High street banks High streets banks are the local banks you see on high street or in town centre. All High Street Banks are public limited companies (PLC). So their liability is limited. They deliver financial service to the members of public and some local or national businesses. The types of services High Street Banks provides are credit and debit cards, mortgages, loans, investment, accounts, insurance, pensions and standard orders and direct debits. However, before they can become public to enable them to sell shares on the stock exchange. There are three legal requirements which are stated in the law to become a PLC. They have to have £700,000, have 25% of shares to be floated and have to have been existed or trading for at least five years. High Street Banks are more risky due to money being borrowed from government from tax payers and banks can get into serious debt and can even go bust. High Street banks increase and decrease the interest rate e.g. ...read more.

Middle

H. J. Merck & Co. Building societies Building societies are similar to the high street banks but their role is different from them. Because they provide different type of services such as mortgages. Building societies began in UK in 19th century and they are similar to saving and loans institutions in United States. Building societies are known as mutual societies and they are owned by their investors. All the profits they make they have to share it with their customers they can share this by giving interest rate on some amount of money they have into their accounts for example 1% on £1000. Building societies their main aim is not to make profit for their shareholders whom can allow them to offer interest they want to their investors and borrowers but that interest rate cannot have much difference from their other competitors. Their main aim is not to make money but it donât allows them to offer any interest they want it has to be more then national bank is charging it cannot go lower than that. Examples: Barnsley Building Society (A trading name of Yorkshire Building Society) Permanent Building, Regent Street, Barnsley, South Yorkshire, S70 2EH Bath Building Society 15 Queen Square, Bath, Avon, BA1 2HN Beverley Building Society Britannia (Part of the Co-operative Financial Services) ...read more.

Conclusion

The central bank of England BoE is part of the ESCB, but UK has not joined the euro but still it will take part in some of the ESCBâs activities. The London Stock Exchange The main stock exchange of the United Kingdom is about selling and buying stocks, bonds, shares and other financial instruments on daily basis. One of the oldest and largest exchanges in the world, its traces its origins back to 1773. The London Stock Exchange utilizes telecommunication and electronic resources to accept and execute trades. In 2000 the stock exchange transferred its role as UK listing authority with HM treasury to the financial services agency and shareholders voted for London stock exchange and helped it to become a public limited company. To be able to sell your companyâs shares on the stock exchange or to be on the stock exchange market your company needs to meet the requirements which are: 1. minimum capitalisation of £700,000, 2. at least 25% of shares from your company must be offered for sale to the public which means any person from public can buy the shares of your company and they once they have bought the shares they will have 25% control on the business or more if they have bought more shares. 3. Five years or more full trading accounts must be published. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Accounting & Financial Management section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Accounting & Financial Management essays

  1. A2 Business CourseWork

    There are a variety of economic factors that Tesco will have to assess and that will influence their decisions which include: Demand: Demand is important to any business. If there is no demand for a product, people will not buy it and you will not make any profit, and most likely go bankrupt.

  2. The maintenance of accurate records supplies the company with the financial data that assists ...

    as they need to publish their accounts to the public they would want to represent the company positive as possible, (Referring to Appendix 1B). The trading account, which is the top section on the P/L of a sole trader and limited company are done in the same way; the way gross profit is calculated.

  1. Investigating Business Resources

    What are reasons to analyse those costs and budgets? by analysing budgets and costs they can find out if they can work more efficiently and if they can save somewhere in the production process. 9. Analyse the differences between the budget and the real costs: Budgets are forecasts which are put for the production process.

  2. business plan unit

    to decide to pull out of the business due to the working conditions. There is also still a shortage of capital. There is also an unlimited liability this is also a disadvantage in a small business. Also if a partner is to leave the partnership their share of the partnership must be bought by someone else or by yourself.

  1. DIvidend Policies and Financing

    Thus, such Companies distribute dividend at low rates and retain a big part of profits. Trades Cycle Business cycles also exercise influence upon dividend Policy. Dividend policy is adjusted according to the business oscillations. During the boom, prudent management creates food reserves for contingencies which follow the inflationary period.

  2. Sources Of Finance

    Public limited companies have shareholders like a private limited company but the difference in ownership is that any individual can buy shares on the stock exchange. There for any one can have ownership of the business even if they have no experience in running one, this may be an disadvantage

  1. External auditing and societies

    to be recognised were: 1) detection of errors and fraud 2) to prevent errors and fraud by the deterrent and moral effect of the audit 3) to provide spin-off effects. The auditor will be able to assist his clients with accounting, systems, taxation, financial and other issues.

  2. Edexcel Applied Business A2 unit 11 finance task A

    Therefore banks will be more willing to lend a public limited company a loan rather then other types of businesses. For example a bank may not to lend a partnership money as there will be a high risk of not collecting the money back in case the business fails as

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work