Types of Business Ownership
All limited companies are incorporated, which means they can sue or own assets in their own right. Their owners are not personally liable for the firm’s debts (limited liability). The ownership of a limited company is divided up into equal parts called shares. Whoever owns one or more of these is called a shareholder. A Public Limited Company (PLC) can sell its shares on the Stock Market, while a Private Limited Company (LTD) cannot. Unlike a sole trader or a partnership, the owners of a Limited Company are not involved in the running of the business, unless they have been elected to the Board of Directors.
To become a limited company, applicants have to submit a Memorandum of Association which states the business’ name, address and main purpose. It also describes the liability and amount of capital invested. The internal workings of the company including the number of directors, how they are elected and what their roles are described in The Articles. This also describes how profits will be divided.
When the Memorandum of Association has been submitted the Registrar of Companies issues a Certificate of Incorporation which allows a limited company to begin trading. A Public Limited Company first has to raise the sufficient capital, through selling its shares to the public. It has to produce a prospectus, which explains how the business is run, and what it intends to do in the future. Once all this has been done, the Registrar issues a Trading Certificate, which allows the newly formed PLC to start trading.
This is potentially good for my future business as I have rights to my assets. If my business goes bankrupt then I will not lose all my possessions. However as I said above, If I make my business into a Limited company then I will not be able to sell shares over the market. (4) Public Limited Company I might however choose to run my business as a PLC, which will give me advantages, like I will be able to sell shares over the stock market. This might be a god option for my business, but one thing I have to remember is that in every single option there are pro’s and con’s. Even though there are a lot of negative sides to becoming a part of a Franchise, there is one advantage which by far outweighs all the disadvantages. This is the fact that you will automatically be a recognised, due to the fact that you are part of an already established business.
Which type of Ownership shall I opt for? Upon researching business ownerships, balancing and weighing the pros and cons. I have found that a business in the public sector is best for me as I can sell shares on the stock market, which boosts capital for my business. First of all, as I mentioned above I will go for a business ownership in the public sector. Into more detail, I will choose the Franchise option. I have chosen this, because I will be known from the moment my business starts and public awareness is a powerful tool in any business’s arson. The more people that are aware of by business, mean’s more people which will trust my business and use it instead of others.
What Franchise should I choose to be a part of? Now I have chosen to become a franchisee, but to what Franchise should I be part of? I have researched into successful health centre franchises. The gym I would most likely choose to become part of a franchise is L.A Gyms. I have chosen this as it is already a well respected and greatly established amongst the other gyms. Quite a lot of people like to train at L.A Gyms, because they feel that they can trust a ‘branded’ gym.
Here is some background on L.A gyms: LA FITNESS health clubs are the most innovative and vibrant operator of health and fitness clubs in Europe, with over 40 sites. LA FITNESS health clubs offer quality at affordable prices with an emphasis on fun and relaxation.