Task 1:

Business ownership

ASDA's Ownership

A). ASDA is a public limited company, which is also known as a PLC. An American retailing company called WAL-MART owns ASDA. Its shareholders own the company and this causes the ownership to constantly change, as the shares are constantly bought and sold. Most of the companies' shareholders are generally, old aged pensioners, banks and insurance companies.

Before a PLC can be launched, they must have £50,000 or more and it must have a good financial record and, there must be enough people interested in buying shares in order to have a successful floatation.

Floatation is when a company is on the Stock Exchange and is then launched to the public.

WINES PLUS' Ownership

Wines Plus is a partnership and is run by its owners. A partnership can be of a maximum of 2-20 people. The partners of the business share the responsibilities and risks of the business. Usually, if the partners have different skills, this provides the business with greater aspects as a different range of services can be offered and more profits can be made. Also, in some partnerships, there are also some sleeping partners. These are people that invest money into the business and receive a share of profits made but they don't have a say of how the business should be run.

Before starting the business some partners sign a deed. This deed is called the Deed Of Partnership. This deed states every agreement between the partners and what they have to share between them i.e. they share the profits that are made, the salary they receive and what procedures must be followed if there is a dispute between the partners.

Partnerships are governed by the Partnership Act 1890. This act states, all partners are liable for any debts. Unless a different deed has been drawn up, different terms are put through.

As well as a PLC and Partnership, there are also other types of businesses. There are:

* Franchises

* Private Limited Companies

* Co Operatives

* Sole Traders

Franchise

A Franchise is a business, but it doesn't involve the normal risks of starting of as a sole trader. To sum a franchise up, it is a little business that gradually expands. It's like a growing child. It starts of as a baby (the start of the business) and grows into a man (the end of the business growing). Typical examples of a franchise are, The Body Shop, BSM and Kentucky Fried Chicken.

These are also known as enterprises, as they were run by a franchisee and were given permission by a franchisor (an organisation) who owns their products and services that are being provided.

Usually, the franchisee will gain benefits from the franchisor's enterprise as the franchisor supplies goods/stock and displays for the shop and general advice. The franchisor, will gain the exclusive right to sell in a certain area of land.

The franchisee has the responsibility to run the business every day and keeps most of the profits made. However the franchisee must raise most of the capital on their own and he or she must also pay an initial licence to the franchisor. They must also pay some of the made profits to the franchisor for the use of the franchisors name.

Franchises don't only trade in retailing. The also cover other business areas. They are:

* Goods and services

* Production

* Cable Companies

* Care services

Franchises are also allowed to operate in other businesses as long as they gain permission. An example of this can be a small sweet store trading in a hotel. The franchise (the sweet store) pays rent to the hotel so they can trade.

Private Limited Companies

Private limited companies, are companies that are owned by its owners and don't sell shares to the public. Most private limited companies start off as a small store (or sole trader) and like other businesses; they gradually expand over a period of time. Most private limited businesses are run by family members.

They decide to trade as a private limited company so they can:

* Improve their financial security. The owners are now known as shareholders and are no longer responsible for any debts and liability is now limited - if the business goes bankrupt, the owners don't end up bankrupt.

* Look better to the general public, in terms of security. They aim to show they are safe and don't get attacked by thieves.

Private companies only issue shares to its owners. One share represents the company. If a share holder owns one and a half shares, this could out share (be greater) than other share holders. If a company has owners who want the company to be shared between them, then they must have 50 percent each in shares.

Co Operatives

A Co Operative is a company and each worker in the Co Operative receives equal payment. In most companies like Tesco, each department is paid a different salary i.e. if you work on the clothing department; you earn £4.40 whereas if you work on the meat department you will earn £5.20 (based on an employee who is under 18).

In ASDA however no matter what department you work on, you will earn equal pay (£4.00 under 18 and £5.18 over 18).

This is how a Co Operative works. They will give equal pay no matter where you work. In a Co Operative, there is no boss, everyone is in charge and works in a team.

An example of a successful Co Operative is CWS - Cooperative Wholesale Society. They work as a team and aim to help one another and aim to be a successful working unit.

Sole Trader

A Sole Trader is a business that is run by one person. That one person has total control of the business and decides on what needs to be done to the business and how the business can be improved. They also have the choice if they want to employ people and decide what wage they can be given.

It is usually common for a Sole Trader to use their personal savings as capital to start up their business.

A Sole Trader has total control of their business and is therefore in charge of any debts they encounter. However, if the business is successful, they receive a lot of profit but, they must also pay income tax to the Inland Revenue. Hence them paying tax on their gross profit.

Also, as they are a Sole Trader, they have Unlimited Liability. This means, if the business is unsuccessful, they loose everything. They will loose the business, house and other personal possessions e.g. TV, jewellery, paintings etc.

B). Every business has made an ownership agreement whether it was formally or informally.

Formally is when the ownership agreement was discussed and was then announced e.g. the WAL-MART takeover from ASDA was a formal takeover.

Informally is when the ownership agreement was agreed on the spot. In this case the Wines Plus partnership was agreed when the business was started up.

C). Every Business has a legal status. The legal status is what the company is i.e. ASDA's legal status is a PLC and Wines Plus's legal status is a partnership.

D). Each of the businesses have an owner. In this case, the owners of Wines Plus are the partners and the owners of ASDA are, WAL-MART and the share holders.

Each of the owners has responsibilities in running the businesses.

The Wines Plus owners are responsible for:

* Each others actions. This means if one partner went into debt and died, the other partner(s) would be left to pay them off.

* Every profit made is split 50/50. They must all pay income tax on all their profits.

* Having unlimited liability. If they were limited liability partners, and they had sleeping partners, the sleeping partners are only liable for the amount they invested into the business. But at least one partner (a non sleeping partner) has unlimited liability for debts. If the debts are not paid, they loose all personal possessions e.g. their home.

* Paying the running and start-up costs are easier to pay, as they have all put in money into the business. Expanding the business is also easy to pay for. An example of expansion is John Lewis. They started off as a small partnership but expanded. They have over 34,000 employees and each is classified as a partner and receives shares.

* Partnerships are mainly associated with solicitors, doctors, accountants etc.

As ASDA is a PLC (public limited company) they are owned by the shareholders. They (ASDA) are responsible for:

* Constantly changing its image as they want to attract new shareholders and shares are always being bought and sold. They aim to attract new share buyers. Most of their shareholders are O.A.P (old aged pensioners), banks etc.

* Abiding (listening/following) with the various Companies Acts and abiding by the Stock Exchange.

* If they want to gain extra finance, they can choose from a variety of sources. They can be banks or financial institutions. The other option to raise extra finance could be to issue additional shares.

* They must provide a reason to why they need the money and for how long they need the money. Money raised by shares doesn't need to be paid for. Although there is a limit to how many extra shares can be offered as it all depends on the companies' financial value.

* If one public limited company buys all the shares of a smaller public company this is known as a takeover. An example of a takeover is the WAL-MART ASDA takeover. WAL-MART bought ASDA for £7 billion in 1999 and this made ASDA part of the WAL-MART company. However, if a big plc doesn't buy a smaller plc but they want to expand, they can merge with a company. This means they join together and expand the size of the companies. An example of this is, Glaxo and SmithKline Beecham which happened in 2000.

* The net profit of the company is paid to the shareholders. They are paid in a dividend. A dividend is basically, a share of profits divided among stockholders. The dividend that is paid all depends on how much profit there is in the company and how many reserves there are. The decision of the balance is also important as, the size of the dividend depends if the shareholders might sell, but this also leaves insufficient funds to renew machinery or equipment.

* Other examples of PLC's are Sainsbury's, Marks & Spencer and Tesco.

E). Each business has a type of ownership. Wines Plus's ownership is a partnership and ASDA's ownership is a PLC (public limited company).

Wines Plus has decided to make their business a partnership, as they are a married couple and as a married couple they aim to share everything. They both wanted to be involved in a business they both wanted to run. The husband deals with the paperwork and the wife deals with customers and deciding what special offers their store should offer. (E.g. buy a coke get one free). Also, they wanted to earn a little bit more money and improve their security and running a small shop was the perfect decision/choice.
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ASDA has decided to make their ownership a PLC, as they have rival companies like Tesco, Safeways and Sainsbury's. The rival stores are all PLC's and ASDA aims to do their best in order to beat their rivals. ASDA is also a massive business with over 244 stores nationwide.

As well as being a PLC, they are owned by American retailer WAL-MART. WAL-MART own over 1,522 worldwide. (This is based on worldwide supermarkets and excludes discount stores, SAM'S club stores and Neighbourhood Markets).

Task 2:

Industrial and Business Sectors

A). All companies belong ...

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**** Parts of this are very good but other parts have been written with very little understanding or evidence of research e.g. ASDA's ownership. The witer does improve and there are good examples of analysis and evaluation.