Business At Work
This unit Business At Work is about exploring the world of business and investigating what makes a business work successfully. Information shall be obtained through numerous sources both internal e. g. Annual report, interviews, etc, and external e. g. Website, textbooks etc. The business selected must be either a medium sized-organisation defined as having up to i?? 5million in turnover and employing between 500-2500 employees or a large company having in excess of i?? 5million in turnover and more than 2500 employees.
The company MBDA is a multinational organisation, which signifies that it operates in more than one country. It is the largest missile systems company in Europe and second only to rival American firm RAYTHEON in the world. MBDA employs more than 10,000 people and is a leading global player in its field of activity, with an annual turnover of more than 2billion euros (approximately $US 2billion), an order book of more than 13billion euros and over 70 customers worldwide. MBDA’s parent company BAe SYSTEMS is on the Footsie 100-index of London’s leading shares, which is a list of the top 100 companies in terms of value.
So, if an individual buys shares in BAe SYSTEMS they are purchasing a part
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5000, the maximum that the investor is liable for is i?? 5000 so, no other personal assets such as property, car etc can be seized in order to meet the company’s debts. Separate Legal Existence A limited company is a “separate legal entity” in the eyes of the law: this means that it can sue and take legal action in its own name, own property and other legal contracts in its own name. Although the directors are considered to possess a separate legal existence to that of the company, there have been cases where company directors have been held accountable.
Cases such as the P&O ferry disaster that was costly in terms of human life and compensation payments. In this particular incident the directors faced criminal charges, which eventually resulted in P&O ceasing operations and led into insolvency. Another case concerned one of the world’s largest companies, the collapse of ENRON which resulted in many private investors contemplating huge financial losses, the criminal prosecution of directors and the discreditation of prominent accounting consultancy Anderson Consulting or as it is known at present “ACCENTURE”. Continuity
Its separate legal existence is not affected by events such as the death of one of its shareholders. Separation of Ownership and Control Unlike partnerships and sole traders, where the owners usually run the business themselves the owners – the shareholders – of limited companies have little say in the day-to-day running of the business. It is the directors, elected by the shareholders at the AGM (Annual General Meeting) of the company who will control the company even though they may not hold any shares. Directors will also appoint managers and other staff to assist them.
Policies are decided by the board of directors and are carried out – with some delegation – by the Managing Director. There are other types of ownership such as sole traders and partnerships, which differ from the limited companies private and public. Both sole traders and partnerships have no separate legal existence from its owner or owners, this means that these firms cannot enter contracts in their own names meaning that the owners will sign the legally binding contract in their own names which signifies that should the business go bankrupt, the owners would be held fully responsible for the company’s liabilities.
Sole traders and partnerships have unlimited liability which means that they are responsible for any debts incurred by the business so, if the business were to go into insolvency the owners’ personal assets would be sold at auction in an attempt to recover funds to pay creditors. Also fewer formalities are necessary to set up a sole trader or partnership than limited companies. Compared to the sole trader and partnership the private limited company has the advantages of limited liability, greater continuity and a separate legal existence.
Its business affairs, however, are not as private as its name might suggest: unlike the unincorporated businesses, the private limited company must have its accounts audited and available for inspection by various groups or organisations e. g. Prospective shareholders, Inland Revenue etc. Compared with a PLC or public limited company, however, the ordinary limited company does not have the same opportunity to raise extremely large amounts of capital by offering its shares to the public as it is a private limited company it can only sell shares to an elite group of shareholders usually involved in the running of the business.