Exploring Limited Companies
Limited companies can range in size from two people to tens of
thousands and from a few thousand pounds to millions in turnover and
from one to many thousands of shareholders.
The Limited Company has its own legal identity, which is separate from
the directors and owners (shareholders). This means it can own assets,
form contracts, employ people, sue and be sued. They have limited
liability, which means any debt repayment is limited to the
shareholders funds (share capital). This is a very important
difference to the partnership, without limited liability.
Limited companies are run by directors who are appointed by
shareholders. They form a board of directors headed by a chairperson.
They are responsible to the shareholders in the running of the
business and can be voted from the board at the A.G.M. (Annual General
Meeting) where shareholders vote according to the number of shares
they hold.
Companies do not pay income tax, they pay Corporation Tax which is at
a different rate to income tax and the overall percentage depends on
the amount of profit.
The Companies Act 1985
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The above act requires two documents, the Memorandum of Association
and Articles of Association. The Memorandum sets out the constitution
and gives detail about the company.
The Companies Act requires the following:
· Name of company
· The name and address of the companies registered office
· The liability of its members
· The amount of capital to be raised and the number of shares to be
issued. (a minimum of two- no maximum).
The Articles of Association deal with the internal running of the
company.
· Shareholders rights depending on types of shares
· Procedures for appointing directors and limits of their powers
· Length of directors service before election
· Timing/frequency of company meetings
· Arrangement for appointing company Auditors
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Companies cont…
The above two documents including detail of the directors are sent to
Limited Liability Partnership and limited liability company Limited Liability Partnership(LLP) Many businesses are formed as partnerships. There are actually several different types of partnerships, including limited liability partnerships. Partnerships are the most common business structure for businesses that have more than one owner. Many businesses, ranging from retail stores to accounting firms, are structured as partnerships. A business partnership is a for-profit business established
EXPLORING BUSINESS ACTIVITY 1.0 Terms of Reference For this assignment I been asked by the manager to produce a formal report for two contrasting organisations Tesco and Cancer Research UK. 2.0 Procedure In order to complete this assignments I need to gather as much information as I can from different sources, such as course notes, internet and a Newspaper. 3.0 Findings The two organisations chosen are Tesco and Cancer Research UK. 3.1 Tesco 3.01 The Type of Organisation Tesco
be forced to shut and the income and profits would stop. There are tax advantages such as, national insurance contributions; this saves a sole trader hundreds of pound on profits, and this saves them setting up a limited company and having to become an employee of a company. Long Hours- The sole trader has to work long hours to keep the business afloat. Labour relations- when and if a sole trader employs workers the relation between them is likely to be good because the business is
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or doctors is a good example. Private Limited Company ( PLC ) These companies may start as family running affairs and develop. The reference to 'limited' means the extent to which owners are liable for the financial affairs of the company if they owe money or crease trading and have to pay off debts. If 1000 shares are available for issues and Henry Smith has Three of them he is responsible for three thousandths, 0.3%, of the debts the company owes. As a sole trader it would have been
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The difference between them is how the shares in the company are sold/available. As the names suggests, the shares in a private limited company are sold privately, and in a public limited company, publicly. Private shares are usually only possessed by people with an interest in the company or works for the company. If someone wants to buy shares in a private limited company, they must contact an existing shareholder and agree on a price for their share(s) to have
of as a soletrader, its finance functions were carried out by Jack Cohen. A finance function is to raise enough finance to be able to afford to carry out the business, also to cost and price the product. Now as tesco is a larger PLC (public limited company) its functions are carried out by departments were the finance director is responsible for, Mr. Andrew Higginston. The finance department based at tescos is now the central office. Finance functions of tesco: Tesco employs specialist's
is an organisation chart that shows who is in control of who and which departments have authority. Here is a chart that Tesco would use: http://www.docstoc.com/docs/114704336/Organisational-Chart-- This is needed to make sure that everyone in the company knows who to turn to if they have a problem as well as who is the boss and who has the span of control. The span of control is the number of people that an individual has responsibility for in an organisation. In Tesco one of the biggest examples
there for it is easier for me to talk about the services they provide their customers with. The website of this PLC also is very useful because it provides us with a Student Section in which the website allows us to look at the company’s history, company information and also it provides us with a Media Centre detail. Sainsbury’s has many articles in local newspapers and reports on television. It is a very popular business in the form of a PLC and therefore I have Chosen this business. I have
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reporting has been the cause of stakeholders of various companies to lose thousands of dollars because liabilities are not fully disclosed on the parent company’s statement of position. Investors and other stakeholders use ratios such as the debt-to-equity ratio and return on assets ratio to determine a company’s ability to pay its long term debt. Operational leases, an example off balance sheet tool, is a financial structure that allows a company to use property, plant, or equipment without the
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