Marks and Spencer
b) Limited liability companies (LLC)
A limited liability is a type of investment in companies that protects partners from losing more than they invested. This mostly manifests itself in occasions whereby a company is in immense debts and is about to fall (Marks and Spenser Plc. 2011). The limited liability stipulated that owners be not obliged to pay off debts in an event that the company is unable to pay them. Marks and Spencer registered as a limited liability company in 2009 (Marks and Spenser Plc. 2011).
Obviously, the first advantage of the limited liability entity is the personal protection from liability of the business. In a case where the company is sued or is in debt, the owner’s personal assets are protected. Secondly, there is less paper work in this case. LLC do not have to make official documents like in corporations. In addition, their startup capital is much lower compared to corporations. The other advantage of the LLC is that they are not double taxed (Nationwide Incorporators Inc. 2010). Only the personal income is taxed therefore income or losses are passed through. Limited liability companies also invite more investors due to increased credibility. Such businesses create credibility with investors and customers due to their stability and commitment. Finally, they have a more flexible management organization compared to corporations.
However, the limited liability companies have more expenses in startup capital and other lawful expenses compared to sole proprietorship. Such expenses include franchise tax, annual reports, among others. Transfer of ownership is also very tacky in this situation compared to corporations. Finally, the LLC has very poor resource structure in case of law reference since it was only introduced a few decades ago (Nationwide Incorporators Inc 2010).
The limited liability companies probably affect owners in one way or other both positively and negatively. For instance, since the company profits are not taxed, individuals are expected to pay their own medical insurance and social security (Nationwide Incorporators Inc. 2010). On the other hand, in the event of unprecedented profits, owners can share the profits however, they wish with very few legal restrictions.
c) Private limited companies and public limited companies
Private limited companies and public limited companies are both protected under the limited liability. However, ownership of shares in both companies differs in number, ownership, and transferability. The Private limited companies have two as a minimum number of owners and fifty as the maximum number of owners (Cite HR Community insights 2010). On the other hand, public limited companies have a minimum of seven but do not have a maximum limit. Another difference in shares in both companies is that in the privately owned, shares are transferred only with consent of the owners while in the public limited company’s shares are transferred freely. In addition, the government must have a majority of shares for it to qualify to be a public limited company while in the private limited companies, private entities hold majority of the shares. Finally, the public limited companies have more regulations compared to the privately owned.
Marks and Spencer is public limited company (Marks and Spenser Plc. 2011). This is because its shareholders exceed 50 and are listed in the London stock exchange. Shareholders are required to make decisions regarding certain issues regarding the company as stipulated for the directors to execute them. For this to take place, shareholders are invited for an annual general meeting to help make these decisions (Cite HR Community insights 2010). They also have a right to access end of year accounts as well as their dividends depending on the profits made. Finally, the shareholders can sell their shares at will.
Reference list
Marks and Spenser Plc. (2011) Euro medium term note programme (Offering circular)
Nationwide Incorporators Inc. (2010) LLC advantages and disadvantages. http://www.nationwide-incorporators.com/article-llc-advantages
Cite HR Community insights (2010) What is the difference among Ltd., Pvt. Ltd., and Public Limited Company http://www.citehr.com/50521-what-difference-among-ltd-pvt-ltd-public.html#ixzz2UpMHEXSg
