Share capital- In relation to the 2015 case study

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Share capital- In relation to the 2015 case study

Advantages

  • Roshan, Sheena's Dad has many business contacts whom could be willing to buy shares in the business, the advantage of this is that there will be no interest to pay, this is particularly good for SAS because Sheena is planning on setting up SAS at the end of the main season, August, meaning she won't have to worry about loan interests draining on her finances throughout the winter.

Disadvantages

  • Roshan owns 25% and Sheena owns 23%=48%, therefore if a large investor buys the remaining 52% required, then Sheena could lose control of her business which would go against her wishes of wanting to be an entrepreneur and independent. As they could make decisions like moving away from the Surrey area.

Evaluation

Share capital is good as she will be able to set up her business quickly but there is a risk that she could lose complete control of her business.

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