Private Limited Company
Tesco could be run as a private limited company because funding will be available as there would be more than 2 shareholders who are willing to invest their money into the business. The board of directors must be committed to the business because if the business is doing well, they are most likely to be doing well. This will stop other investors placing takeovers bids in order for them to own the business which in this case is Tesco, without having to have to pay the market value of the business but instead paying much less as the shares would have most likely dropped because of the loss the business may be making. The take over bid may increase its value as there most certainly will be more than one bidder and so they will bid until eventually everyone has backed down apart from one bidder.
As a private limited company, the business would be isolated from fluctuations in share prices on the Stock Exchange in response to changes in the economy. But a private limited company may not be able to raise as much share capital as if it was a PLC Ownership of Chester Zoo I will now explain Chester Zoos history. In 1931 George Mottershead founded Chester Zoo. He wanted to build a zoo of his own because when he was a child, he visited a zoo called Belle Vue Zoo in Manchester; reports suggest that he was very upset seeing large animals in small cages, so he fuelled his developing interest in creating a zoo of his own which is now called Chester Zoo.
3 years later his venture became the North of England Zoological Society, and with considerable skill and enthusiasm, he kept the Zoo going through the Second World War. Rapid expansion followed after the war. ‘Always Building’ was a slogan of the time. He received the OBE, an honorary degree of MSc, and served a term as President of the International Union of Zoo Directors. During 1937-1960 Chester Zoo magazines were available for sale at ï¿½4.99 each in the Zoo library at Cedar House. Later in 1978 George Mottershead ages 78 died having realised his dream of a ‘zoo without bars’. Chester Zoo at the present is the most wildlife attraction in Britain counting more than 1.3 million visitors in 2007. In the same year Forbes described it as one of the best fifteen zoos in the world
What Ownership does Chester Zoo have? Chester Zoo is a registered Charity Limited by Guaranteed. Charity Limited by Guarantee means type of organisation normally formed for nonprofit purposes, in which each member pf the company agrees to be liable for a specific sum in the event of Liquidation. It is often believed that it cannot distribute its profits to its members but this is not actually true. A company limited by guarantee that distributes its profits to members would not be eligible for charitable status.
The zoo is owned by the North of England Zoological Society. This group would have limited liability i.e. the people involved would not lose any money (personal possessions) if the Zoo went out of business. These people would have limited liability. Chester Zoo’s mission statement is “The role of the zoo is to support and promote conservation by breeding threatened species, by excellent animal welfare, high quality public service, recreation, education and science” This mission statement supports Chester Zoo being a Charity Limited by Guaranteed.
Chester Zoo is a nonprofit organisation because its main aim is to teach people about conservation at the zoo (the protection of plants and animals that are in danger in their natural environment “the wild”). Another aim at Chester Zoo is to educate people, by making them aware of the role of the Zoo and informing people about what they can do to help. As well as education another aim at Chester Zoo is scientific investigation, this is finding cures for diseases affecting animals and the causes of environmental problems. Finally Chester Zoos other aim is enlightened leisure, this is to provide tourists with attractions that offers an educational worthwhile day out.
Why does it have this from of ownership? Chester Zoo is a charity because the money made can be re – invested back into the zoo and does not have to go to shareholders. The money re-invested back into the zoo can be used to pay the staff at the zoo and food/shelter etc for the animals. Also the money can be used for vital medical equipments for ill animals. This is why being a charity is better than being an Ltd or PLC because you don’t have to pay the money to anyone.
Another reason why Chester Zoo has this form of ownership is that profit at Chester Zoo is not the main concern, the zoos main concern in conservation such as breeding program for endangered animals because they care about the welfare of animals. If Chester Zoo was a business they would need to make a sustainable profit, if they didn’t, many of their shareholders will sell their shares off, leaving the zoo with huge financial problem let alone the wages for staff at the zoo and food/medication for the animals.
Also Chester Zoo being a Charity means that they don’t have to pay tax to the government such as income tax (on gifts given), corporation tax, stamp duty, VAT, rates, capital gains tax and inheritance tax plus increased public support as the organisation is more likely to be viewed as legitimate and worthy. Furthermore Chester Zoo being a charity can sign up to the gift aid plan. Members of the public might visit Chester Zoo as a charity because they want to support it. In the UK today there are probably over 500,000 voluntary organizations – fewer than 200,000 of these are registered charities.
Charities can be organized in a number of different ways – they can be an unincorporated association, a trust or a company limited by guarantee. Each of these has a different governance structure – for example, a charity that is formed as a registered company will be governed by a board of directors, a charity that is set up as a trust will be governed by a board of trustees. Every charity has to have a governing document that sets out the charity’s objects and how it is to be administered. To register as a charity, an organization must have purposes that are defined under law as charitable. These include the relief of financial hardship, the advancement of education, the advancement of religion and other purposes that benefit the community.