Research Question: Which form of business ownership is more likely to grow and succeed as a business?
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This essay will discuss various aspects of franchises and private limited companies. For example, how they are formed, their profit distribution, taxation etc. It will also highlight which form of business is more likely to succeed.
The Al Habtoor group is a private limited company and are a LLC. It operates in the secondary sector. Each member has limited liability and will only lose their investment in the business. This business can have a maximum of 50 shareholders and need the agreement of all shareholders to sell their shares.
Subway is a
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You also get access to market research along with advertising and merchandise assistance. Plus, you get associated with a well known brand and get access to operator manuals and stock control systems. The disadvantages are that the franchise owner does not have control over business decisions and must follow the operator manual, and you are not obliged to renew the franchise agreement at the end of the franchise term and a royalty fee needs to paid to the franchisor for doing business with them. You are allowed to work within your own territory and need to pay a startup fee and do not control the pricing or the business model.
Private Limited Company
The advantages in a ltd company are that you have limited liability and will only lose what you invested. You can raise the company’s capital since it can have up to 50 shareholders. However, growth might be limited to the small amount of shareholders and you need the agreement of other shareholders to sell your shares.
A nice advantage to owning a S corporation is that it is limited liability which means that the owner/owners of the company
And there are some advantages of a public limited company such as there is limited liability for the shareholders which mean the maximum losses that will cause are the amount that the shareholders invested in that company it won’t cause more than that so for the investor the risk is limited. Other than that the public limited company’s potential capital that they can raised is large they can raise fund by selling shares or borrow from bank. Also public limited company is easier to obtain financing because most of the banks and financial institution would like to invest to the larger company just like PLC. PLC have high continuity although the helm of company step down the company can still operating normally because shareholder can transfer their shares to anyone. There are many advantages of PLC but it still have some disadvantages for instance :PLC must make public annual financial report of the company also if the company close the liquidator must be realize the all assets to distribute to all creditors and shareholders. So the owner of Tesco are those people who bought the shares of Tesco. Furthermore, every year Tesco will held the annual general shareholders meeting. Tesco will report the annual accounts, strategic report and directors' report etc. to the shareholders in the meeting. Therefore the shareholders of Tesco can have more information and data to grasp more about
Below I have set out a table to show the Advantages and Disadvantages of a public limited company. ADVANTAGES DISADVANTAGES Shares offered for sale on the stock exchange, so that large amounts of capital can be generated. Shareholders protected by limited liabilit... ... middle of paper ... ...ibit the already efficient practices from continuing.
First of all, franchising allows the company to achieve success in Turkey with minimal economic and political risks. Since opening of own outlet in Turkey requires an agreement with the government and careful research on local market conditions, it is to the advantage of M&S to have a local partner working under company’s brand name. And about 700 outlets in 34 countries is the best show of efficiency of franchising.
The advantage of franchising is that he will grow a whole new customer base in those areas. It leads to increase in profits. He will also be able to find out what new programs he can develop to gain more customers through this new customer base.
There are two types of limited companies: Private and public. Shareholders own private limited companies. Members of the public cannot buy the shares and the shareholders cannot buy or sell their shares without agreement from the other shareholders. Family owned businesses or larger businesses such as Virgin would fit into this category. Public limited companies have shares on the stock market and can be bought and sold by any member of the public, this way the company can raise further capital and expand their resources. Tesco and British Telecom are such examples. Both these types of limited companies have limited liability, which means the owners of the business are only liable for the amount they invested in the business (unless the debt is so large that the business has to be sold to repay the debt).
Not having to answer to a corporate boss is the dream of many and the flexibility that owning a business franchise creates provides this option. Success is not reached by simply creating a business, however. The level of success is measured by the size and efficiency of the business. Business growth is the driving force of the economy. The additional jobs and revenues created when a business expands allow the economy to grow at exponential rates. One of the fastest and most popular ways to increase the size of a business is to turn it into a franchise, which can then be purchased by individuals. Franchising provides opportunities that are beneficial to both the parent company and the purchaser. The company that owns the business can expand without having to pay such a large initial cost to open a new store since the franchise purchaser pays a cost to open the business. As well, the company can regulate many of the business activities so that there is a sense of consistency throughout all of the locations. The purchaser is allowed to use the trademarks and goods of the franchise which already have a large market presence. As well, they are provided with training and work standards by the company to help their business run smoothly (Kalnins & Lafontaine, 2004, p.761). Looking at the business model of the world’s largest food retailer, McDonald’s, provides great insight into franchising and business growth in general as well a better understanding of a global business that utilizes the franchising technique.
4. Control: the members of the LLC have the ability to set up control of the corporation as they see fit.
Any two or more persons, associated for carrying on a lawful business with a motive to earn profit, may subscribe their names to an incorporation document and fill the same with the Registrar to form a LLP. The LLP shall be a body corporate and a legal entity separate from its partners.. The LLP will have perpetual succession.
Franchising is a business tactic for getting and keeping clients. It is a marketing system for creating a likeness in the minds of present and potential customers about how the company's products and services can help them. It is a method for distributing products and services that satisfy and suit customer needs. (Gappa, 2001)
According to Section 42 (1) Companies Act 2016, a private company is also known as a company limited by shares and the number of shareholders must not exceed 50 people and the minimum number of shareholder is 1. With the following Section 11 (2) Companies Act 2016, there should have issued shares capital in a private company.
Our research topic is – “The process and advantages of purchasing a franchise business rather than starting your own business.” It is quite evident that business owners, that are not very well known of the competitive industry in the market, choose to side with buying a franchise to understand how a certain business runs. They use this experience and grow there on otherwise business owners use their gained expertise from franchise experience and implement them in the new business.
A joint venture is like a partnership, but only lasts for a set time. They make work on a project and dissolve afterwards. An S corporation is different from the other forms of corporation because of how the owners are taxed and the rules for shareholders. A limited liability company provides the same sort of rules for liability and taxation as a partnership, but members that are not heavily regulated. One last form of ownership is a cooperative. In this form individuals or small businesses come together to form a larger more beneficial
7-Eleven focuses on teamwork and encourages all franchisees to train every employee to be a leader instead of a follower. As an employee in 7-Eleven, I have been always told to dream as if one day I would be franchisee of a 7-Eleven store. One other thing the corporate tells the owners to look at is hire someone who would become a franchisee one day. Managers are expected to give out extrinsic rewards, and be a charismatic leader.
A franchise is simply investing money in a location or store, and then having the store become your own business after learning how to manage the entire business. You earn the majority of the profits, and you also don't have to worry about operations. You'll be taught by the company on how it run the entire business, and this is the reason why this is a huge and very easy way to become rich. Franchises require quite a hefty investment depending on the business you plan to buy. However, if the business is in high demand, there is profits to be made. Take for exMple the Cold Stone Creamery business. Countless people purchase one of their many franchises. The money is very good, the opportunities are endless, and the fact that there is no more need for advertising is what makes this more worth the investment in the long