Private limited companies tend to be smaller than public ones and are often family businesses. There must be at least two shareholders but there is no maximum number. Shares in private limited companies cannot be traded on the Stock Exchange, and often shares can only be bought with the permission of the Board of Directors. Private limited companies may find it possible to raise cash (by selling shares) than unlimited liability businesses. The shareholders can also have the protection of limited liabilities. Public Limited Companies:
A public limited company has its shares bought and sold on the Stock Exchange. The main advantage of being a public limited company is that large amounts of capital can be raised very quickly. One disadvantage is that control of a business can be lost by the original shareholders if large quantities of shares are purchased as a part of a 'takeover bit'. It is also costly to have shares quoted on the Stock Exchange. Co-operatives: A worker co-operative is a body that is owned by its members - the people that work for it. A worker co-operative has limited liability.
To become a member of a worker co-operative an employee would buy a share in the organisation. Each member has one vote in making decisions. This type of business is democratic and prevents one or a few individuals gaining control. Members receive a share of the profits of the business in the form of dividends. When they leave the co-operative they can take their funds back. The basic principle behind a worker co-operative is that those who do the work should get the rewards. They tend to be small-scale local enterprises. Franchises:
Franchising is an attractive option for those looking for a ready-made business opportunity. The franchisor has already established a brand and a business model. The franchisee then has to put money and effort behind their side of operation to reap the rewards. The franchisor grants the right to the franchisee to use their trading name in a particular area. They will often supply products, business systems and 'know how' to the franchisee.
The franchisee usually pays a fixed sum to have the franchise, followed by regular payments. In 2006 franchising generated 10 billion of sales in the UK and nearly 400,000 people operated franchises. Charitable Trust: A charity is an organisation that is set up to raise funds and support other people or a good cause. The business objective of charities is to create a surplus to use to helping others. A surplus occurs when the revenue (money coming into the charity) is greater than the costs of running the charity. The management of charity work is overseen by a group of trustees, who are volunteers with a reputation as responsible citizens. Many will have a range experience in both charity and business activities.
Charities have to register as such and must produce annual accounts that are available to be viewed. Most charity organisations start out when someone recognises the need for such an organisation. For example, the charity Shelter was set up in 1966 to help the many homeless people on the streets. The Toybox Charity was found in 1991 by the Dyason family, who were horrified by a television documentary showing the plight of some of the 250,000 children orphaned by civil war in Guatemala. The charity grew into a comprehensive rescue plan for children who live in the streets in Guatemala City.
Charities employ paid managers and workers (unlike voluntary organisations, which rely on the goodwill of their staff). Public Sector Businesses: Public sector organisations are owned by the government. There are government departments and government agencies. A government department like the Department of Customs and Revenue operates on behalf of the government and is staffed by civil servants, known as customs and revenue officers. Their job is to collect income tax and other taxes on behalf of the government, to collect repayments on student loans, and to make payments known as tax credits.
Rather than seeking to make a profit they will want to collect taxes efficiently and make sure that taxpayers get a fair deal. Government agencies are more independent than government departments. These are bodies that have been set up by the government to take responsibility for a particular activity. For example, the Child Protection Agency is a government-funded body responsible for looking after the rights of children. Although it is funded by government accountable to government it has considerable freedom to manage its own affairs.
These bodies are set up with tight guidelines but in the interest of fairness they need to be seen to operate in an independent way. Local government is an important branch of government activity. Local councils are responsible for supervising and, in a small number of cases, owning local services. Local councils cover specific areas of the country. What is your local council? In their specific area, the local authority will give contracts to private companies to run certain services such as managing refuse collection. It is the job of the council to oversee the efficient running of these services.
Local councils also own and supervise the collection of rents and repairs to social housing. They manage local parks, leisure centres and swimming pools, street lighting and other essential activities. Cadbury Schweppes Cadbury supplies services (such as Cadbury's world) and goods (chocolate bars, gums and candies). They supply this goods and services for profit, they are not free to the customers. Cadbury wants to make profit so Cadbury supply its product at cost or above cost, never below costs. Cadbury supplies its products to the corner shops, big stores and directly to the customers.
Cadbury doesn't work with the central and local government agencies. The founding of the Cadbury business dates back to 1831 when John Cadbury first made cocoa products on a factory scale in an old malthouse in Crooked Lane, Birmingham. In 1847 the business moved to larger premises in Bridge Street, which had its own private canal spur linking the factory via the Birmingham Navigation Canal to the major ports of Britain. Business continued at the Bridge Street site for 32 years and by 1878 the workforce had expanded to 200, so more space was needed.
This heralded the move to Bournville and the building of what is now one of the largest chocolate factories in the world. John Cadbury retired in 1861 handing over the business to his eldest sons Richard and George. It is to their leadership that the success of the enterprise is owed as the company prospered. Cadbury now is a public limited company in the private sector and it is owned by shareholders. The main advantage of being a public limited company is that large amounts of capital can be raised very quickly.
One disadvantage is that control of Cadbury can be lost by the original shareholders if large quantities of shares are purchased as part of a 'takeover bid'. It is also costly to have shares quoted on the Stock Exchange. Nowadays Cadbury's key shareholder is Nelson Peltz (a leading US businessman) who bought 62 million shares which is equivalent to 2. 9 per cent of its total equity. Cadbury's business activity is to make chocolates and sweets and to produce it to the businesses in the secondary sector globally, it's good to operate globally because you have much more customers and bigger profits.
