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Summary Unit 1: P1 - EXPLORING THE FEATURES OF TWO CONTRASTING BUSINESS
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Unit 1: P1 - EXPLORING THE FEATURES OF TWO CONTRASTING BUSINESS
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private limited company can be formed by any type of business, such as a plumber,hairdresser, lawyer, and photographer.
The owners' liability is limited. It lets people be their own bosses, and any new owners must
be invited, shielding the company from outside interference. To raise funds, shares in the
company can be sold.
There is frequently more paperwork in some cases, other people can view the business'
financial information, it can be time-consuming to set up the business, and it may require
outside professional help to manage its finances.
PLC
Large businesses may decide to become a public limited company (Plc) as becoming a PLC
comes with a great advantage because shares are sold to the general public on the stock
market which means shareholders who own shares become part owners of the company
and have every right to take decision making of the business of how to run it.
The company is able to raise additional funds through share capital. The shareholders'
liability is limited. Because larger businesses can achieve economies of scale, there are more
price negotiation opportunities with suppliers.
It is costly to establish, requiring a minimum of £50,000 to get started. Accounting and
reporting requirements have become more complex. There is a greater possibility of a
hostile takeover by a competitor.
Limited liability
The phrase "limited liability" refers to the fact that the business owner or owners are only
liable for business debts up to the amount of their financial investment in the company. The
limited liability applies only to certain types of businesses, such as private limited
companies.
Unlimited liability
The term "unlimited liability" is linked to the fact that the company's owner or owners are
personally accountable for all of the company's obligations, no matter how large they are.
The key distinction between unlimited and restricted liability is the amount of risk a firm is
willing to take. Any firm that has limitless responsibility faces a greater risk than one that
has restricted liability.
Adidas (Ownership and Liabilities)
Adidas is a business that has unlimited liability, it is a German multinational corporation
founded in 1924 by Adolf Dassler. Shoes, apparel, and accessories are designed and
manufactured by the company. It is Europe's largest sportswear company and the world's
second largest. In 1995, Adidas became a public limited company after 6 years of becoming
a corporation, which has increased its reputation and helped the company to raise capital to
invest in future expansion.
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