For my portfolio, I was asked to do an assignment on two businesses. I have chosen Tesco, which is a public limited company and Vectone Gnanam Telecom, a private limited company.

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INTRODUCTION:

For my portfolio, I was asked to do an assignment on two businesses. I have chosen Tesco, which is a public limited company and Vectone Gnanam Telecom, a private limited company.

Description of Tesco PLC.

Tesco is a private limited company founded by Sir Jack Cohen in 1924. The first three letters from the name of the tea suppliers name "T.E.Stockwell" and then joined these will his own surname this then formed the name "Tesco". He liked this name so much it became the company's own. Tesco is one of the United Kingdom's largest supermarkets They sell varieties of clothes, household items, gifts, kids items and food items. They produce their own breads and some product. They provide their own transport to carry their goods. They provide Internet services. Tesco provide car insurances and house insurances. Tesco have 1982stores all over United Kingdom and they have 164,500 shareholders.

Tesco is one of United Kingdom's largest supermarkets making 3millions profit a day. Tesco employs over 300,000. Tesco is a company dedicated to professional management of both people and property. Tesco is a caring organisation that endeavours to exhibit pride and excellence.

Description of Vectone Gnanam Telecom Ltd

Vectone Gnanam Telecom is one of the Telecommunication companies in London based at Regatta House 58-Marsh Wall London E14 9 TP. They provide Telecommunication facilities by having shops, which provide telephone service and telephone cards. They sell telephone cards worth £5, £10, and £20 etc. Vectone Gnanam Telecom provides local and international telephone service at reasonable cost as a limited company. They offer special rates to India and Sri Lanka they offer good rates to various parts of the world by providing different types of cards like Gnanam, India Direct, Call Lanka, Euro City, World Call etc which are associated with Vectone Gnanam ltd. The business previous names are Vectone Telecom Centres Limited and Gnanam Telecom Centre Limited. Vectone Gnanam liked to do their business at an international level because there is a larger profit outside the United Kingdom in addition they advertise their products through leaflets and they mostly receive payments in cash rather than credit. They have to pay before using the services in telephone cards like Vectone Gnanam Telecom while business like British Telecom they use to pay after the services Users can access Vectone services by the Internet or telephone services from their landline, mobile phone, PC or directly from a web site. Vectone Gnanam Telecom operates in around 60 countries around the world.

Task 1

Type of Ownership

Private Ownership

If individuals own the business rather than government is called private ownership there are six type of private ownership

. Sole trader: one person owns this type of business and he or she is responsible for the profit or loss of the organisation. If the business is successful he can keep all the profit if the business is unsuccessful the owner loses money. Sole traders have unlimited liability

2. Partnership: this type of business is set up minimum of 2 members to maximum of 20 members and they are responsible for the profit or loss of the organisation if the business is successful they will divide the profit according to investment, however if the business is unsuccessful they all lose money. Partnerships have unlimited liability.

3. Private limited company: in this type of business, the owner and family members have shares and the public can not buy shares. Shareholders are often directors they need to have 50% shares to have a control whether singly or together in this business there is a minimum of one shareholder and one director and they have limited liability.

4. Public limited company: this kind of business sells shares to the public and anyone can buy the shares. In this business directors are just salaried employees if a business want to go public they must have more then £50,000. They have limited liability

5. Franchises: a franchise is a way of owing or running a business without taking a risk of starting on your own. This kind of business has two responsible parties involved the franchisee and franchisor. The franchisee is the person running the business on a day- day basis and they keep most of the profit, but they have to raise most of the capital and pay initial licensing fees. The franchisor will often supply raw materials and give help and advice.

6. Cooperatives: cooperative is a business where there is no boss, the employees are owners and profits are divided equally and the business is run in the collective interest of the work force.

Public ownership

This sector in Britain relates to all the institutions and organisations, which are owned, and run by the state and are overseen by the government. It includes

. Central government: these are government departments, all dealing with different matters at national levels. A government minister oversees each department and it has own budget. Ministers bid for money each year and the amounts agreed forms part of the main governments budget and it is raised from taxes. It may be HM Treasury, Ministry of Defences, Department of Transport, Home Offices and Department of Health.

2. Local authorities: local authorities are responsible for local public services. The money is used to provide local government services are mainly from revenue grant, business tax, council tax and they provide services such as education, tourism and highways etc.

3. Public corporations: in this type of ownership, each industry is operated separately with a chairman and a board responsible for the day-to-day operations of the organisation. Annual reports are submitted to parliament and the accounts are published annually for scrutiny by the publish accounts committee. The organisation received subsidies and grants from the government but was usually expected to pay its way overall. Some of the main public corporations in Britain's are the post office, the Bank of England and BBC.

TASK 1A

Type of Ownership of Tesco

Tesco is a public limited company. Tesco is a supermarket where any person can buy shares. Tesco has 2291 stores around the world they have expanded over Europe and Asia. In Tesco the directors are just salaried employees. Shareholders own public limited companies like Tesco if the business is successful there will be increase in share value, which will increase overall the value of the company. If the business fails the shareholders may decide to sell their shares, which can lead to a fall in price this makes the company vulnerable.

Liabilities

The money owed by a business is called liability. There are two types of liability, unlimited liability and limited liability. The concept of unlimited liability means that the owner may also lose his or her personal possessions and be made bankrupt it is suitable for sole trader and partnership. The concept of limited liability means the owner can never lose more than they have invested no matter how much money invested.

Liability of Tesco

Tesco is a public limited company, which has limited liability. If the business fails in a public limited company the shareholders are not responsible for the debts of the company, the shareholders can never lose more than they have invested.

Type of Ownership of Vectone Gnanam Telecom Ltd

Vectone Gnanam is a private limited company, which started as a sole trader. They provide cheap Telecommunication services. When they started to sell only Gnanam cards when they have a demand in local and international market they thought to provide various kinds of customers from different countries. They provide euro city for Europe and America, call Africa for different countries in Africa, and India direct for India. Their main drawback is that phone cards can be duplicated, which will spoil their reputation.

Liability Of Vectone Gnanam Telecom

Vectone Gnanam is a private limited company, which has limited liability. If the business fails in a private limited company the shareholders or owners are not responsible for the debts of the company. The shareholders or owners can never lose more than they have invested. If the business fails in a limited company the owner does not go bankrupt, instead they go for liquidation, the bank and building society will check that the business they are dealing with is financially sound before lending them money.

Task 1B

Why does Public Limited Companies suit Tesco plc?

In public limited company like Tesco any person can buy shares. The shareholders in these companies are different from directors who are free to choose whether or not to own shares. Many directors are simply salaried employees. In public limited companies there should be minimum of two directors and two shareholders. They can be easily expanded as many thousand of people and organisations may buy shares in the company. Very large public companies can often operates more cheaply than small companies as they operate on economics of scales for instance, they can mass produce goods for sales and buy in bulk to save money. If the company is successful, the shares automatically increases this will increases the value of the company. If a company wants to go public must have more than £50,000 and must have a satisfactory financial track record.

In public limited companies like Tesco annual general meeting must be held each year and all shareholders must be invited. Shareholders who do not agree may raise objections or vote against a proposal made by the directors. The shareholder will expect to receive a dividend in return of their investment. They will also want their shares to increase value if the company has a poor year and the shares fall in value, they may be tempted to sell. This could make the company vulnerable to a take-over bid, as it is then relatively 'cheap' to buy. The shareholders must have little interest in the long-terms prospects of the company and simply be interested in quick returns on their investments while directors may be looking at the long-term security of the company. The original owners may lose most of their control over the company.

Why does Private Limited Company Suit Vectone Gnanam Telecom Ltd?

Many private limited companies like Vectone Gnanam Telecom started as a sole trader or partnerships. They are mostly in small-scale operations, often with family members running the business. A private limited company like Vectone Gnanam Telecom issue shares to the owners. Each share represent a share of the company equals one vote therefore a shareholder with more than half of the shares could always outvote the other shareholders. The person who has more than 50% of share have control on the business whether jointly by two people or singly.

Many limited companies have only three or four shareholders there is a minimum of one director or shareholders but there is no upper limit for shareholders. In limited company like Vectone Gnanam Telecom the shareholders or owners are often directors and they usually work in the business every day. Shares can not be sold to public. Shares can only be transferred with the agreement of all shareholders. This gives owners direct control over the business. Bank and building societies are more willing to make loans to a limited company particularly with good financial records.

A limited company is not allowed to trade under the name of an existing company as this likely to cause any confusion to the customers or suppliers. A limited company should work under the law. In a limited company the organisation has a separate legal identity and is known as incorporate. In a limited company they have to follow some procedures, they are memorandum of association, which relates to the structure of the company and articles of association, which say how it operates. In a limited company corporation tax is paid on the net profit.

Task 2

Industrial sectors.

A)

The three main sectors in the United Kingdom are

) Primary sector

2) Secondary sector

3) Tertiary sector

Primary sectors:

The primary sector deals with producing or extracting raw materials. This can be a natural resource. It includes farming, fishing, mining, forestry, oil and gas drilling.

Secondary sector

The secondary sector deals with manufacturing, processing, assembly and construction. Manufacturing is the process of turning raw materials from the primary sector into a finished product. This includes building construction, utilities like water, electricity and gas. Manufactured goods can be either capital goods or consumer goods. Capital goods are used to help make other goods or provide services. Consumer goods are two types of them they are consumables, consumer durables. Consumables are the product consumed, like pencils and food items. They are not consuming for a long time where consumer durables lasts for a long time like electrical items like television and radio.

Tertiary sector

The tertiary sector provides services to the public so it can also be called service sector. It divides into four sections they are

) Public services:

This includes personal services, defence, health, education and administration because they provide services to the public.

2) Financial services

This includes banks, building societies, insurances companies because they provide financial services.

3) Transport and communication

This includes transports companies like stagecoach for bus, British railways and airways for train and aeroplanes.

And communication facilities did by British Telecom.

4) Retailing, distribution, hotel and catering.

This includes services likes wholesales and retail trade. It includes shop, pubs, inn, fast food, and supermarkets.

My business belongs to both the secondary and tertiary sector.

Tertiary sector includes business activities such as retailing, distribution and transport. Tesco provides their own transport to carry their goods. Tesco provide retail services they sell household items, food items, kids items, and food items. In secondary sector they turn raw materials into finished products. Tesco produces breads, bags and labels their products.

Tertiary sector includes services like communication services Vectone Gnanam provide Telecommunication services and they produce their calling cards that have bought for use by customers so they come under both sector.

b) What other industries or business are in this sector?

. Public services.

It includes national and local government offices, which operate social security, health and social work such as public and private hospitals, nursing homes, vets, and social workers, the defence force such as home office, police, royal army, royal navy and royal air force, education department such as schools, colleges, universities and driving schools and personal services such as trade unions, employer organisation, news agencies, zoos, libraries, museum, dry cleaners, hair dressers, funeral directors, gambling and betting shops, theatre, amusement park and religious and political organisations. Examples of public services are new ham general hospital, New ham Sixth Form College, metropolitan police.
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2. Financial services.

It includes banks, building societies, Insurances Company, credit agencies, pension companies and financial advisers. Examples of financial services are Barclays Bank plc, Nationwide Building Societies.

3. Transport and communication services.

It includes Stagecoach, British railways and airways, taxis, and bus and coach rentals because they provide transport services and various kinds of communication services such as Telecommunication services such as British Telecom and Argos Telecom, postal services like royal mail and courier services.

4. Retail, distribution, hotels and catering services.

It includes business like retail sales and wholesalers such as ...

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