Franchising allows you to be self-employed and to deal with a known product or service without having to take the risk of launching something new on to the market. Running a franchise is often seen as a good compromise between being a small trader with complete control of your own business and being part of a larger limited company. The franchisor benefits from its outlets being operated as independent businesses, each with a strong interest in ensuring that the main company is a success. The employees and capital of the franchisor company can be concentrated on developing the product.
Public Limited Company
Public Limited Companies are owned by their shareholders -those people (individuals and institutions) who invest their money in shares issued by the company on the exchange. The total amount of those investments provides the capital to finance the different business activities, which the company undertakes, although additional capital may be borrowed.
A proportion of the profits are distributed to shareholders in the form of a dividend usually paid every six months.
Shareholders buy shares: -
- In the hope that the shares will increase in value
- To receive the dividend
Each shareholder has one vote for each ordinary share they own. This right to vote may be used at the annual general meeting but in reality, unless a great number of shares are owned there is little hope of a shareholder influencing the activities of the directors and the managers who actually control the company on a day-to-day basic.
Tate & Lyle is a large organisation with stakeholders. It is international. There are advantages and disadvantages for being a Plc (Public Limited Company)
Advantages
Owned by shareholders who have limited liability shares may be brought and sold by the public. The issue of additional shares can provide a vast source of finance for Public Limited Company.
Disadvantages
Since shares can be openly traded on the stock market, Public Limited Companies are open to take over. Most shareholders will have no interest or involvement in the running of the company.
Splitting of Public Limited Company.
A Public Limited Company may split its holding in several
Private Limited Companies
Liabilities of my two companies
Liability
An important aspect of the business ownership, which is related to whether the business in unincorporated or incorporated, is liability. The owners of a business establish the business and put their money into it, because they expect to get a return on it. They may also be personally liable for any debts the business has incurred such liability may be unlimited or limited
Unlimited liability
Royal Mail has unlimited liability.
Unlimited liability means that the owners of the business are personally responsible for all the debts the business incurs. If the business is unable to pay its debts because it has insufficient funds available, the debts must be paid in full by the owners, even if they have to sell the business and all their personal possessions- including their house and car to do so. The owners of unincorporated business have unlimited liability, since the affairs of the business are considered the affairs of the owners.
Limited liability
Tate & Lyle has limited liability.
Limited liability means that the owners of the business are only responsible for the debts of the business up to the amount they have invests in the business. If the business is unable to pay its debts the owners will only lose the amount they originally put into the business (they may of course also lose the business itself, if it has to be sold in order to pay its debts). The owners of incorporated businesses and therefore responsible for its own affairs.
Activity of the business ownership
Tate & Lyle
The ownership of Tate & Lyle suits the business activity because it is a huge international company dealing with processes for the making of sugar & its products. Tate & Lyle is very expensive to run. It involves large investments of money. Today, it is the largest cane sugar refinery in the world, operating at up to 160 tonnes per hour and processing about one million tonnes of raw sugar each year.
The financial investment in the company is huge and it is much easier for the company to expand. The ownership of Tate & Lyle suits the business activity.
Royal Mail Mount Pleasant
The ownership of Royal Mil suits the business activity because it is a large international company dealing with processes of sending letters around the world. Franchisor always has large companies to back it up. The products than go to sole traders. Franchising is a cheap way for Royal Mail to open many outlets without the responsibility of overseeing the running of each outlet.
