Comparing Tescos and Cadbury - limited liabilty company vs. soletrader.

by andrewselvarajahyahoocouk (student)

Public limited company (Tesco)

The purpose of a public limited company is to sell goods and make profit. Also to satisfy our needs. Public limited company (Tesco) is Limited liability Company this means their personal possession won’t be taken to pay off debt. Tesco is a large business because they operate in different countries and have more than 5,000 staff members.

Firstly, limited liability business shareholders are not liable for the business debt. This means they don’t have pay using they personal possessions if the business goes busted. Tesco is a limited liability company. Secondly unlimited liabilities means the owner have to take full responsibility over the business this means they have to use their personal belongings to pay off any dept. Cadbury shop’s owner have unlimited liability. Sole trader have unlimited liability. Partnership have unlimited liability. Public limited companies have limited liability

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Tesco shareholders will not lose their personal belongings if the business goes lost in profit. Cadbury owner have to take full responsibility over business this means paying of any debt using their personal belongings. Tesco also sell shares on the London stock exchange market. This means you own some part of the business. This is how public limited such as Tesco Company starts the business

Tesco have more capital because they sell shares to the public and they want to expand and Cadbury have less capital income because they don’t have shares and they don’t want to expand the ...

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Tesco have more capital because they sell shares to the public and they want to expand and Cadbury have less capital income because they don’t have shares and they don’t want to expand the business.

Tesco have limited liability so they don’t have to sell their personal belongings to pay off the debt but Cadbury shop have unlimited liability this is means they have to sell their possessions if the business is in debt this is because Cadbury is sole trader which means there is only one owner.

The similarity between both businesses is that they both want to sell goods to the public and satisfy their needs and wants. Also they both want to make profit.

Shareholders own the business. Boards of director are appointed by the shareholders to run the business. Board of director makes decision on behalf of shareholders. Shareholders but the profit a divided into shares because more than one person owns Tesco.

The Cadburys owner’s bank statement is kept private because they have no shareholder. Whereas Tesco’s financial statement is made available to them because they have so many shareholders so the finance detail have to be stated to the public if some want to but some shares also the public limited company so the public have to see the finance detail.

Tesco is able to raise more capital from the public to expand the business. Also they have limited liability. Tesco can raise capital income by issuing more shares and they have no limit for shareholders. Shareholders who have over 50% of shares can take over the business. This means the past owner lose power over the business.

Financial information can be obtained by rivals meaning they are able to tell if the business is doing well or not. They are lot of legal formalities required to become a shareholder. The profit is shared along lots of shareholders. However a sole trader business doesn’t have so much legal formalities and easy to set up. An example of this is Cadbury.

In uk there are 1,988 Tesco shops and internationally 150 stores including America and china. This makes the shop international. The Cadbury shops have only one shop in Enfield which makes it local.

Andrew Selvarajah