Business at work
McDonalds is a company, which has been around for years; it is one of the world most leading organisations. It is a service provided to the local community and public all over the world. It is a very successful company and still continues to grow today. McDonalds: Is the world’s leading food service retailer with more than 30,000 restaurants in 121 countries serving 46 million customers each day. Is one of the world’s most well-known and valuable brands and holds a leading share in the globally branded quick service restaurant segment of the informal eating-out market in virtually every country in which we do business.
Serves the world some of its favorite foods – World Famous French Fries, Big Mac, Quarter Pounder, Chicken McNuggets and Egg McMuffin. As you can see below I am just explaining the basics of McDonalds Company. In a partnership there must be at least one general partner who is fully liable for all debts and obligations of the practice. Many partnerships are in professions of doctors, lawyers, and accountants. These professions rarely require large sums of capital to establish their practices therefore meaning they do not need a company to raise finance from investors.
Partnerships tend to operate in local or regional markets. A company is an association of persons that contributes money to a common stock; employ it in some trader or business. A company has a separate legal identify from its members and can sue in its own name. There are 2 types of companies: public companies and private companies, both, which require a minimum of 2 share holders. Private limited companies: Is mainly aimed for small and medium sized operations. This type of business organisation is particularly suitable for family firms and for small enterprises involving just a handful of people.
Private companies tend to find it easier to attract capital due to investors having the benefit of limited liability and the access to finance making it easy for the business to expand and grow. In some highly specialised circumstances private limited companies may trade internationally. Although it is usual for this type of business to trade regionally and perhaps nationally if required. A public limited company has its shares bought and sold on the Stock Exchange. Companies like next have to go to the expense of having a ‘full quotation’ on the Stock Exchange so their share prices appear on the dealers’ visual display screens.
The main advantage of selling shares through the Stock Exchange for any company that uses a franchise operation; this means that it could be a sole trader, partnership or public Limited Company, that large amounts of capital can be raised very quickly. One disadvantage is that the control of the business can be lost by the original shareholders if large quantities of shares are purchased as part of a ‘take-over bid. It is also costly to have shares quoted on the Stock Exchange. To create a public company, the directors must apply to the Stock Exchange Council, which will carefully check the accounts.
A business wanting to ‘go public’ will then arrange for one of the merchant banks to handle the paperwork. Selling new shares is quite a risky business. The Stock Exchange has ‘good days’ (when a great many people want to buy shares) and ‘bad days’ (when a great many people want to sell). If the issue of new shares coincides with a bad day, a company can find itself in difficulties. For example, if it hopes to sell a million new shares at i?? 1 each and all goes well, it will raise i?? 1 million; but on a bad day it might be able to sell only half its shares at this price.
There is quite a deal of luck involved, therefore, in getting the day just right to launch new shares because the date has to be chosen well in advance. Some companies are very unlucky, launching their shares on a day when people are gloomy about prospects in the economy. One way around this problem is to arrange a placing’ with a merchant bank.
The merchant bank recommends the company’s shares to some of the share-buying institutions with which it deals (pension funds and insurance companies, for example), who may then agree to buy, say,one-tenth of the new shares. In this way the merchant bank makes sure the shares are placed with large investors before the actual date of issue comes round. Then, even if it is a bad day on the Stock Exchange when the shares are issued, the company’s money is secure. Another common method by which public companies raise share capital is by offering new shares for sale to the general public. The company’s shares are advertised in leading newspapers and the public invited to apply.
When a company is up and running, a cheaper way of selling is to write to existing shareholders inviting them to buy new shares. This is a rights issue. A stock broking firm acts as an investor’s professional eyes and ears. It is the investor’s link with the stock market and its role is to obtain the best price available for the investor’s shares, whether they are buying or selling. A stockbroker can also deal with all the paperwork involved in transactions in stocks, such as gilt-edged securities and shares, which leave the investor free to concentrate on his or her investment strategy.
Many people find their stockbroker by word of mouth alone (through friends, colleagues or acquaintances who recommend their own stockbroker). There are, however, a number of other ways in which to find a good stockbroker. It is possible to find a list of stockbrokers in Yellow Pages. There is also a national directory of private client stockbrokers issued by the Association of Private Client Investment Managers and Stockbrokers. It starts with an explanation of the main features of the membership, then lists the type of service offered by them, followed by the range of available products.