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Ownership of firms.

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Introduction

Ownership of firms 1. Two reasons why almost half of the businesses in the UK are owned by sole proprietors are: * They are very easy to set up. * When a profit is made by the business, the profit automatically belongs to the owner. This is a big advantage and appeals to many people thinking of opening their own business. 2. Businesses owned by sole traders often fail. There are several reasons why this may occur. Some of them are as follows: * The business may get into debt and therefore result in personal loss to the owner of the company. * They may not like the long hours and hard work that they have to do. ...read more.

Middle

* The business may fail due to no economies of scale - for a business, it is cheaper for them to buy their stock in bulk. This means that they can also sell cheaper because they are buying cheaper. If they can't buy in bulk, they can't sell cheaper stock. 3. There are many advantages to registering a company as a limited company. One main reason may be that they have a limited loss. This means that if the company goes bankrupt or gets into debt, they will not lose their personal belongings. 4. Private Limited Company - This is a type of joint-stock company (that is, it is an incorporated business - where the business has a separate legal identity from the owners). ...read more.

Conclusion

A company is run by a Board of Directors (who are elected by the shareholders) and this is headed by a Chairman. Public Limited Company (P.L.C.) - This is the other, much larger, type of joint-stock company and, just like a private limited company, a PLC is an incorporated business, is run by the Board of Directors on behalf of the shareholders and has an Annual general meeting at which shareholders vote on certain key issues relating to the company. The main difference between a PLC and a private limited company is that a PLC can sell its shares on the Stock Exchange to members of the general public and can, therefore, raise significantly more finance than a private limited company. NICOLA BUXTON - 1 - ...read more.

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