Advantages and Disadvantages of a Public Limited Company

What is a Public Limited Company?

A Public Limited Company is a business that has decided to offer it’s shares on the public stock market. The Stock Market is where anyone can invest in a Public Limited Company. These are usually high value, large businesses that can have massive profits, and offer dividends to those who invest.

In order to become a Public Limited Company, PLC, you need;

  • At least two directors.
  • A Secretary
  • And you must float at least $50,000 shares on the stock exchange, to become a PLC.

Unlike other businesses, a PLC is often owned by a board of directors, that dictate the decisions of a business. PLC’s must also pay Dividend, which is money that the investors receive from the business, determined by their share value. As PLC’s have external influences, they also fluctuate in value and therefore can loose money. Some businesses owners also find that they can loose control. Being a PLC can bring in more capital and make the business more known publically on the sock exchange.chart market up of public limited company

For contrast, to become a Sole Trader. All you have to do is contact HMRC (Her Majesty’s Revenue and Customs) and every year fill in a self assessment. An LTD must send a Memorandum of Association and Articles of Association. For this reason it becomes a lot harder to do so and often people will employ a Secretary. To be a PLC can take lots of time and can sometimes not be possible for companies with a very bad image. Companies also may struggle if they are unreliable or have seasonal traits, such as a manufacturer of Christmas gifts.

Advantages of a Public Limited Company

  • Having Shares will fund expansion, allowing the business to grow.
  • This also raises company profile.
  • The business can raise a lot of capital because there is no limit for shareholders to invest.
  • Shares are transferable, so investors can split profits.
  • You can get input from investors.
  • Investors may try to grow the business, through things like discounted advertising, if they own part of another business.

Disadvantages of being a Public Limited Company

  • There could be a possible loss of control, as people may find that shareholders own over 50% of the shares, entitling them to the ownership of the business. This is also known as a divorce of control.
  • Shareholders may have other plans to maximise profits over social and ethical goals.
  • Share prices could collapse.
  • There are a lot of legal formalities.
  • Fluctuations in share price could make a company worthless overnight.
  • PLC’s are hard to maintain. As they are usually large, often everyone has their own ideas.
  • Some companies may be overvalued.
  • Some do not have $50,000 worth of shares to float.

A PLC is usually for large companies. Small businesses will not always expect to grow, Corner shops for example, will not grow beyond what is possible due to the local footfall. Therefore PLC’s are often global businesses.

Understanding Different Business Types

There are many business types of organisation, these all have their advantages, so it is important to know which is better for which task, otherwise a company may find some aspects harder than they should be. The main business types are;

Business Types [icon name=icon-building]

  • A Sole Trader is a business owned by an individual, It can have many employees. Common sole traders could be corner shops or man-with-van businesses.
  • A Partnership is a business owned by two or more people (usually up to 20), the ownership of the business is split between them. A partnership may be a small manufacturing company or some large accountancy firms have larger quantities of partners.
  • A Franchise is a business that is owned by a franchisor, and the licensing to use the brand name is given to the franchisee to sell products under their name. Common examples would be fast food restaurants or garages.
  • A Private Limited Company (or ‘LTD’) is a company that offers shares, but does not sell them to the general public. Generally they will have either small amounts of capital, or very large amounts. The size of the business can vary, and can be a multinational company or a medium sized business.
  • A Public Limited Company (or ‘PLC’) is a company that sells it’s shares on the stock exchange, allowing members of the general public to invest capital into the business.
  • A Co-operative is a business set-up to serve the public, and may have ethical goals, over profits and sales. Some supermarkets work in this way.
  • A Social Enterprise is a business who’s money goes toward a social goal(s). Examples would be a company supporting people with an illness or disease.
  • There are also Lifestyle Businesses who’s owners work as part of their lifestyle. This can depend on the characteristics of the entrepreneur.

Most of these business types operate on two different types,

  • Limited Liability is when only the Business assets can be taken to recover debt. Limited Liability is where the owner is protected from any trouble the business suffers, and vice versa.
  • Unlimited Liability is when the business is not protected from such problems, and if the business were to get into financial trouble or insolvency, then the owners assets could be taken as a circumstance.

An LTD (Private Limited Company), must send a Memorandum of Association and Articles of Association. To receive a Certificate of Incorporation and Limited Liability. Becoming Incorporated means that the company and the owner are seen as two separate entities legally.

To be Unincorporated, would mean that the business and the owner are seen as one legal entity.

Limited Liability
AdvantagesDisadvantages
  • The owner is not responsible for the debts of the company.
  • The business is not effected by the owners problems.
  • Sole traders may find it easier to secure trade credit as it is checked against your credit rating.
  • The owner has to pay Corporation Tax.
  • It usually takes time to register.
  • There may be additional cost as the owner may have to hire an accountant.
  • The owner may face troubles moving profits or assets from the company to him.
  • It may be harder to secure good trade terms with suppliers as they may see the company as a potential liability.
  • This means your business type is Incorporated.

 

Advantages and Disadvantages of Types of Processing data

When data is processed there are multiple methods of processing data, there are several types that all have individual Advantages and Disadvantages.

Batch, Interactive and Transaction Processing

Batch Processing

Batch Processing is when data is processed in ‘batches’ (groups)

 

Advantages

  • Batches mean that the process does not require human interaction, this allows the system to be automated and means that it can be left running for multiple sessions at a time, that could potentially last a long time, This type of process can also allow for custom processing ‘jobs’. Which means that the data can be suited to fit the needs of the user, for example, a bank wants to process a large quantity of bank statements, with a temporary notice at the top, they would be able to customize the ‘job’ to be processed with the new notice.
  • They can take a long time to process and may require multiple hours to complete, they may also require multiple retrys and query’s, so being able to compute data in batches means that all the necessary data can be consolidated for the job.
  • Batch processing also means that the data can be run at low points when there is little load on the system.

Disadvantages

  • Using ‘big data’ can take a lot of computing power and can take a long time, and could still process GIGO. (garbage in, garbage out) Stopping batches may cause the system to corrupt the data involved and the system it is using may exhaust the resources of the machine, causing the process to fail.
  • Batch processing could include anomalies that may not have been accounted for, for example when someone had filled out their name on a form as ‘Mr Davies’ when the form only required ‘Davies’, the result could be that a letter that has been batch produced ‘Dear, Mr Mr Davies’.
  • The Batch process could mean that users receive incorrect information until their data has been processed.
  • Data must be accurate to prevent GIGO.

Examples : Mail merge, Bank Statements, Mass Emails, Game World ‘chunks’, Video Rendering.

Interactive Processing

Interactive processing is when a system performs processes as it is being used.

 

Advantages

  • When playing games, only the crucial information that requires being rendered or physics that need applying to objects need to be processed, allowing for a smoother gameplay. This may also be considered a disadvantage as it can break the immersion of the game when textures are rendered poorly or objects do not have their expected physics, such as objects that do not fall to the ground, or signs do not render their text fully and appear blurred.
  • Websites can check that reservations are not double booked as users place their orders, usernames can be checked for availability as they sign up, emails can be parsed for validity.
  • Websites such as dominoes can start to create an order, before the customer has even completed their order.
  • Video Viewers can set the quality of a video, or it can be done automatically, while the video is playing.

Disadvantages

  • Interactive processing cannot take place on very taxing processes that require a lot of computation.
  • Interactive processing may not be possible until the process is completed
  • Interactive processing may mean that data could become corrupted, such as pausing a rendering video or deleting data that is open by other processes in place.
  • Online Shopping could offer discounted prices are out of date as the offer has expired, but was already added to the customers basket.

Examples : Online Shopping, Video Rendering, Video Live Streams, Booking Seats.

Transaction Processing

 Transaction processing is mode one at a time.

 

Advantages

  • Transaction processing is fast and efficient, and the data can be updated quickly and securely, booking a seat on a flight and in a cinema ensures that your seat is not double booked.
  • Effective for high traffic websites and concerts where there is high demand for a product.
  • Transaction processing means that customers do not withdraw funds they don’t own.
  • Transaction processing often means that the system can prevent two events happening at the same time.

Disadvantages

  • Transaction Processing requires the transaction to be completed before it is accepted, therefore there can sometimes be considerable wait times before a transaction is complete.
  • Transaction processing means that the system must always be available during operating hours, therefore when a system goes down, there can sometimes be great repercussions.

Examples : Banking, Stock Control Systems, Booking Systems.

The use case for each type can vary, however most have set types that work best for the solution, so it is important to know which one is bet for a solution, or you could run into issues.

Data, Information and it’s Differences

Data itself is valueless, however when provided with context, it becomes valued, a database contains lots of raw information, and therefore it would be extremely hard to interpret anything from it, for example here is a table from a database:

YesBlue5100No

Without context, its information means nothing, it could mean anything. It is abstract, however when combined with some context, it becomes useful and can be useful.

 Andrew has completed his homeworkYes
Andrew’s school house colorBlue
Andrew’s last test score5
Andrew’s highest test score100
Andrew is real No

Now that we have provided this table with some context, it makes more sense, this is the difference between information and data. Information is data that has been given meaning. Although it is odd to keep data about a fictional Andrew, it is funny to think that within this website, data is stored that will contain Andrew’s table, and only when this page is read will it make sense what the purpose of this information is for.

  • Data is anything from numbers and letters to characters or metadata, it may be inputted into a computer through a form or another computer system.
  • Information is data with context, it makes sense. It becomes information once you are familiar with what it is referring to.

An ICT System is something that provides information, automation, data or computation to a user. Some examples of an ICT System are:

  • A School Website.
  • A video rendering server.
  • An online picture editor or gif creator.
  • A fire alarm system.
  • A sprinkler system.

ICT is visible everywhere and can be extremely beneficial to society, you reading this website is the result of hundreds of ICT systems being monitored by individuals called System Administrators or Sysadmin for short. Short of the simple systems that keep the website running, there is also the bigger picture systems, such as the time management servers, update servers for the OS of the website and your own computer, Record and bill systems checking that the server is paid for, Website analysis systems indexing this website on Google and other search engines, Security and Antivirus checking your router for bad traffic and even ISP systems, ensuring that your and this end of the connection is working, and if any of those systems were to fail, catastrophic consequences could occur.

 

Characteristics of an Entrepreneur

An entrepreneur must have a certain set of skills in order to be successful and lead them to a more prosperous life.

Some positive characteristics can be just important as some negative ones, without them they may be unbalanced and blinded by the possibility of success.

Do what you enjoy

It’s fundamental that you are happy with what you do or a lack of motivation can be reflected over your work. Don’t accept jobs that are too demanding as they can lead to a lack of motivation.

Be motivated and enjoy what you do

Without motivation and drive you are bound to fail, without drive, you won’t get anywhere and could struggle financially because of a lower clientele reflected in your work

Be good at what you do

Take pride in your work and make the best of a bad job at the worst of times, keep motivated and anticipate failure. Failure to understand may lead to a possible loss of clientele and sales, not being able to provide for your clients is unprofessional.

Be charismatic

In order to win clients a leader must be able to negotiate, delegate and understand clients. Otherwise they may lose possible clients. Someone who is unable to woo clients may struggle and be left behind, leading to a loss of sales and a damaged reputation.

Be a leader

An entrepreneur must be able to delegate and lead a group to success as going alone could lead to failure. If an entrepreneur cannot lead their team, they may struggle to produce what is required.

Be a problem solver

An entrepreneur must be able to solve problems, anticipate issues and look out for possible obstacles, without the foresight required be an entrepreneur. Reluctance may be your downfall and lead to failure.