types of business organisation

Question 1

advantages of a PLC:

Answer 1

• shareholders have limited liability meaning the that the creditor can only take assets or finance that belongs to the company.
• it is easy to borrow finance due to PLC’s size of reputation meaning if they need it ASAP it doesn’t take much to get it

Question 2

disadvantages of a PLC:

Answer 2

• setting up a PLC is costly and complicated meaning that if not set up correctly things can go wrong.
• dividends are shared with many shareholders meaning people may be getting paid less for the work they are doing.

Question 3

advantage of multination:

Answer 3

• it creates jobs which boost local economy and employs more workers who will contribute to tax
• it improves the skill workforce, so if staff provide high standards they will gain more customers towards the firm.

Question 4

disadvantage of multinational:

Answer 4

• language barrier between countries can slow down communication
• cultural differences between countries can affect production