The advantages and disadvantages of running a burger store as a Private Limited company gcse buisness studies and economics

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The advantages and disadvantages of running a burger store as a Private Limited company.

Firstly, a private limited company is a company in which one or more shareholders owns the company and receives a relative proportion of the profits relative to how many shares they hold this is called the dividend. Private limited companies raise money by selling shares to people.

The firm also has a separate legal identity, meaning that it can be sued and sue in the companies name and not the owners name. There is limited liability of the owners, meaning that the shareholders losses are limited to the amount of money which they put into the firm, therefore, if the business fails, then the creditors cannot take the personal assets of the people who own the firm.

Shareholders have no management worries of the company; at AGM’s (annual, general meetings) the shareholders can vote for directors to manage the businesses on behalf of the shareholders.

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Although, there are many disadvantages of a Ltd company, they must disclose information to the public about themselves, under the company act of 1981, all Ltd companies must keep very detailed records of their spending, revenues, profits ect., and publish this information to its shareholders, this is a great disadvantage to the company, and a small advantage to the shareholders, as the shareholders can see how the company is doing, financially. But, the writing of this requires accountants, who they have to pay, the printing of many sets of these documents is costly and the postage is very costly, ...

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