Business ownership

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A person appointed by the board who is in charge of the day to day running of Peacocks. Institutional investors Financial institutions, such as banks, insurance companies and pension funds, which have billions of pounds to invest. Lender A person who can keep the needs of individual workers and the aims or objectives of Peacocks in harmony. Share capital The money Peacocks obtains by selling shares to investors.

In Peacocks, the two most important people are the chairperson and the chief executive. In general terms, the chairperson represents the company in the outside world and takes a leading part in making policy. The chief executive is responsible for carrying out company policy and the day-to-day management of the business. In recent years, there have been changes in the ways Peacocks is managed or run. It has become more open and dramatic with a bigger emphasis on teamwork. However, all organisations need lenders who can keep employees working together towards agreed aims and objectives.

Institutional investors own the majority of shares in Peacocks. Their huge blocks of shares give them great influence over the company’s policies and the way in which they are run. The shareholders’votes at Peacocks’ annual general meetings frequently decide who should be elected to the board of directors. If Peacocks is performing badly, institutional investors can force a chairman or even a whole board of directors to resign. Companies can never ignore their power.

The shares can be bought and sold through a bank or the company, which deals in shares. Their current price is quoted on the stock exchange. The nominal, or original, price of the share when it was issued by the company may be 1. However, the price of the shares will rise or fall according to how well or how badly the company is performing. Regardless of the price of the shares, the shareholders are responsible only for the amount they invest in the company.

The bad thing about a public limited company compared to a sole trade business is that forming and launching the company is an expensive business. Many legal documents are required. Advertisements in newspapers are needed, and a prospectus needs to be published as a pamphlet or as a spread in a newspaper. Another thing is that original members of the company may loose control if new members of the company bring in more shares than them.

Peacocks is a public limited company, which is owned by shareholders and run by directors. The shareholders elect the directors. An annual general meeting is held each year and all shareholders vote for or against a proposal made by the directors. It is a large company, which sells its shares to the public. It is a national retailer of clothing, footwear, and home wears. The company was originally found in Warrington in 1884. In the late 1940’s the business moved to Cardiff. The business grew steadily under the chairmanship of Robert Peacock in the early 1990’s.

In 1996 Richard Kirk (ex MD of Iceland frozen foods) was appointed chief executive, in April 1997 a management buy out took place. “In 1998 Peacocks opened a new distribution centre in Natgaru, near Cardiff. The company sold its shares on the London stock exchange on 22 December 1999”. Peacocks has a minimum of 50,000 in initial share capital, which is raised by its aims and objectives and effectively is an advertising brochure ‘selling’ the company. Once the offer for sale is taken up, the shares are determined by the demand for them.

Potential lenders and investors have confidence in Peacocks because it is a public limited company. So it finds it much easier to obtain finance and credit facilities. In addition, the detailed accounts of Peacocks are published and freely available, so potential investors and lenders check out business performance before making their decision. Peacocks can attract shareholders by placing advertisements in newspapers and on television.

Ownership agreement

Basically an ownership agreement guarantees a buyer for retiring or deceased owner interest in a business, thereby allowing the owner to recover his or her investment. The agreement also fosters the continuation of the business by not allowing the departing owner’s interest to fall into the hands of outsiders’ persons who may not be qualified to run the business or who may be incompatible with the remaining owners. Peacocks has a formal ownership agreement just in case some shareholders want to sell off their shares to someone else.

Liability

Peacocks has limited liability, which means that if there are any debts, the shareholders’ belongings will not be touched. The company has to pay for the debts since it is registered in its own name. Peacocks can also approach investors to raise capital for the company as well as getting bank loans. Setting up a public limited company is more complex than setting up as a sole trader or a partnership. Peacocks is bound by the companies Act legislation. The company’s secretary and directors have legal duties for example prepare audited accounts and make an annual return filling these accounts at companies house within the timescales set down by law. Peacocks’ directors are classed as employees for income tax purposes.

The peacocks company has to be registered to the company’s house before running. To do this the following has to be submitted: A memorandum of association This sets out the company’s name, where the registered office is situated, and the company’s objectives. This contains the company name, the main business address, what the business will produce, a statement of limited liability of the members, and lastly the number and face value of shares to be sold.

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