Advantages And Disadvantages Of Business: What Is CHEMICO Ltd?

CHEMICO Ltd is a private limited company or PLC and in this type of business shares will be owned by the original owners or sole trader, friends, relatives and employees. New shares cannot be sold on the open market and existing shareholders can only sell their shares if all shareholders agree.

One key benefit of a PLC is that they have limited liability. A PLC is treated as a separate legal entity from its’ owners or shareholders and this makes the company itself responsible for any debts or losses it may incur. Members themselves are not affected if the company has a downfall; they are only responsible for unpaid shares.

Another advantage CHEMICO has by being a PLC is that they can ensure business continuity. This is so because once again

CHEMICO would have wider avenues for borrowing funds. They can issue debentures, sell shares and financing institutions prefer lending to companies. Always having sufficient funding helps the company to produce at a lower cost thus increasing profits and guaranteeing the future success of the business.

Task 1: b-

A public limited company you can recognise by seeing ‘plc’ or ‘Inc.’ after the company’s name. It is usually formed for very large businesses as it has access to substantial funds for expansion or future plans. It has all of the advantages of a private limited company and appoint a selected group of shareholders called the board of directors to control the company.

However, the key difference between the two is that, unlike a private limited company a public limited company can advertise and sell shares on the open market. This means that the company can raise funds from public sale of shares hence the difference between private and public. Shareholders can quickly sell their shares they wish to whereas with a private limited it is more difficult to sell

According to (Chimoriya 2017), organic organisations may have specialized jobs but those jobs are not rigid because they can be changed on the basis of requirement. Work is frequently organised around teams of employees as it is needed.

Having an organic structure allows for a decentralisation of authority, where top level management encourages subordinates to voice suggestions, opinions and ideas to aid in the decision making process. This would allow for CHEMICO employees in their respective departments to have open communication with each other and not just refer everything to upper management. They can implement decisions on their own for example deciding to purchase a cheaper yet higher quality raw material, or trying out a new