Ownership, Location and Aims and Objectives of Lex Transfleet and Express Diner

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Sections A1, A2 & A3

Section A1 – Describing all four features for both businesses; Lex Transfleet and Express Diner

Ownership of Lex Transfleet

Lex Transfleet is a PLC (public limited company) which is hard to set up because of the paper work that needs to be done. They are owned by minimum of 2 people because but there is no maximum numbers of shareholders. Shareholders in Public limited companies have limited liability which is that they invest in capital and if they were in debt they only lose the amount of capital that they invested in to the business. For example a shareholder in Lex invests £50,000 and the business get indebt of 1 million pounds then they don’t need to pay back the 1 million pounds, they just lose the £50,000 that they invested. The advantage of limited liability is that they do not need to pay the amount of debt because they just lose out what they invested. The advantages of a public limited company is that they have limited liability, the capital increases because public can buy shares and the shares increases in value if company is successful. The shareholders vote for who the directors are going to be and the directors in the business run the business and make all the major/minor decisions. The directors in the business are in charge on a day to day basis. For the business to grow they can advertise shares on the stock exchange and raise more capital. The shareholders in the business have a share of the profit. The disadvantage of PLC is that it can be at risk of being taken over, meaning that Lex can be bought even though it is not for sale, if another business offers a high amount for Lex then the directors can accept it, so the shareholders don’t get to have their say about if they want agree about selling the business. Also the shareholders receive some of the profit that is made by Lex. At Lex Transfleet the annual accounts have to be published to the public, this is an disadvantage for them because then their customers and other business can see what their annual accounts is. Another disadvantage of Lex being a PLC is that there are a lot of difficult legal issues to sort out when forming and running a PLC.

Memorandum of Association

This shows that how many employees work for Lex and what Lex actually is. Also this shows the nature, purpose and structure of Lex Transfleet. This tells us about Lex that they sell out vans and trucks to costumers. Also tells us about the name of the company that is Lex, they will need to clarify the companies name that is ‘Lex Transfleet’.

Article of Association

This shows the internal rules of the company that is Lex. In this they will deal with matters such as shares, meetings, voting and other rights of share holders.

Ownership of Express Diner

Express Diner is a Partnership which is very easy to set up because all they have to do is sign a partnership deed which is like a contract. They are owned by only 2 people, this is why it is called a partnership. If there are more than two people then it would be called a LTD or PLC but if it is owned by only one person then it is called sole trader. The owners of Express Diner have unlimited liability which is that they invest in capital and if they were in debt they have to pay more than what they had invested in the business. For example the owners of Express Diner invest £20,000 and they become indebt of £70,000 then they have to pay it all back. Also they can lose all there assets such as car and house. There are no advantages of unlimited liability but there is a disadvantage which is that they have to pay all the full debts off. In Express Diner they do not have a director because there are only 2 owners which they both have complete control of Express Diner. Express Diner has no danger of being taken over, Express Diner needs to put the business on sale, so then other business could buy it. They cannot buy it without the business being on sale. Also they cannot sell it without the partner’s agreement, or they both have shares in the business and one can sell its share in the business to someone else. The owners will receive share expenses and they have all the responsibility and decision making towards Express Diner. Also the owners will be able to invest more capital in to the business because the owners will be earning a lot of profit which they can invest back to the business. When one owner is absence the other can cover the other’s duties but when one owner dies then the business is unlikely to exist. Also one owner can be dishonest and unreliable to the other owner, this is a disadvantage because then one of the owners will be losing out. Also there can be conflict between the partners because one may have an idea but the other may not agree with the idea which means there is conflict between them, for example one wants to buy a new building but the other disagrees this is causing conflict.

A2. Main Similarities and Differences in ownership

The similarities between Lex Transfleet and Express Diner are that they both are private business. Private sectors are people who own the business and make profit which they keep to them selves. If the business is owned by government this is when it is called public sector, for example hospitals and schools are owned by government. The liabilities are different for Lex Transfleet and Express Diner because Lex Transfleet have limited liability which if the shareholders invest their money, they only lose out what they invested. Express Diner have unlimited liabilities which the partnership invest their money, they will have to pay more then what they invested. The difference between registering Lex Transfleet or Express diner is that Lex is a PLC and Express is a partnership. Setting up Lex is harder than setting up Express Diner because at Lex they have to do a lot of paper work such as memorandum of association and Express Diner they have to sign a partnership deed which is like a contract. Also there similarities for how many people own Lex and Express because there is more than one owner, at Lex there are about 20 people and at Express Diner there are only 2 people. The people in Lex that control them are the directors, they do a day to day basis but the shareholders are the people who control them more. In a partnership they both have the same control over the business, but if one has more percentage of the business then that person is in control, but they can decide if they both can be in control. In Lex they have many shares to sell too many shareholders which they will make a lot of money but Express Diner they have only a partnership to receive the money that they need but in Lex they have many shareholders to receive money. In Lex they have many shareholders, but if one dies then it will not affect the business because they have a lot of shareholders, but in Express Diner they only have a partnership which if one dies then it would not be a partnership it would be a sole trader because that person is on its own.

A3. Improvements to how make Lex Transfleet and Express Diner more effective

Lex Transfleet

To improve Lex they can change in to a LTD which it is easier to set up, also it will be more effective because it will not have any chance of being taken over. For example at Lex they are a PLC, they can be taken over by another company even if they are not on sale, the other company bids for it to the directors and see if they agree, if it is agreed then the shareholders have to agree with it as well. But if Lex is LTD then they can not buy it with out agreeing with all the shareholders and the directors, even if 49 shareholders and the director agreed but 1 shareholder said no then they can not sell Lex. At Lex they are PLC, this is very hard to consult with all the shareholders because there are over a million shareholders but in LTD there are 2-50 shareholders which is easy to communicate with all the shareholders. It would also be hard to have a share the profit or money with a PLC which in a LTD they can share the profit and communicate with each other easier. There are other benefits of Lex becoming a LTD company which is that they can raise more capital and borrow a loan from the bank. In a PLC it is easier to get finance because there investors can invest there money but with LTD they have to take out a loan from the bank which they have to pay back with interest. The main disadvantage of changing is that the fact that it will be costly to buy all the shares of the shareholders, they have to buy the shares to become a LTD.

Express Diner

To improve Express Diner they can change to a LTD which there would be more investors to invest in the business, these investors could be the shareholders and other people. With more investors then there is more capital coming in to the business. Also they cannot be taken over, the shareholders have to agree with each other that if they want to sell the business, even if when one person disagrees then they cannot sell it. Also they will have shareholders in the business, if one shareholder dies this will not affect the business, because in a partnership if one person dies then they may have to close the business. Express Diner can sell their accounts to the public; they do this by publishing the accounts to public. Overall it will help Express Diner with limited liability; this would help them because they would not need to pay the full debt, they only lose what they invested. Also it will be costly for Express Diner to change to a LTD because they have to publish their accounts to the public and complete the memorandum and article of association.

A1 – Location of Lex Transfleet

Through out the country Lex has 20 branches and the country Stanstead was the head office of Lex but it had moved to Coventry. The head office of Lex must have changed location from Stanstead to Coventry because Coventry may have better access from all the other branches; this is because they have become the head office.

In Coventry the Head office of Lex Transfleet is located in Westwood Business Park. This is a good location for the Head office of Lex Transfleet because they are based in the centre of all the other branches and has easy access. The advantage of this is that the cost would be cheaper because it is located in Coventry and the other branches will be near by. Another advantage of this is that they are located around other business which they have their own space and land, the Head office of Lex is in Coventry which is near the M6 that makes it more accessible for Lex to get their goods in such as their vans and trucks, and it is easier for them to distribute their goods because the M6 will not be busy like the city centre.

The head office of Lex is located in Lex because it is near the M40 which they will have easier access and other business that are located in the surroundings. This is important that the location is accessible and is located in an appropriate place because the customers and suppliers will have easier access to bring their vans and trucks in; also they have spaces for their trucks and vans to be parked. They are located in a good place because the roads are accessible for their customers and suppliers.

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 It is very important that Lex were located in Westwood Business Park because it is important that the customers can access Lex such as train, bus, taxi and car. If they were not located in this area then it would be very hard for customers to be able to access Lex. For example if Lex was not located in Westwood Business Park and they were located in the city centre then it would be hard for customers and suppliers to access Lex because of the space and the roads will be busy. They way Lex can get the goods ...

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