REGIONAL PSYCHOSOCIAL SUPPORT

INITIATIVE (REPSSI)
DIPLOMA PROGRAM – CHILD AND ADOLESCENT MENTAL HEALTH

NAME : Kabuku wamuneo

NRC NO. :

PHONE NO. :

STUDENT NO. :

NAME OF COURSE :. Entrepreneurship

NAME OF LECTURE :Linus

COURSE CODE :

ASSIGNMENT NO. :

INTAKE :

DUE DATE :

DISTRICT : LIVINGSTONE

PROVINCE : SOUTHERN.
QUESTION :

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The advantages and disadvantages of a Public Limited Company . As an entrepreneur,
understanding these aspects will help you make informed decisions when considering this
business Advantages of a Public Limited Company:

To begin with ,raising Capital through Public Issue of Shares:PLCs have the ability to raise
substantial capital by issuing shares to the public.Listing on recognized stock exchanges allows
them to attract investments from various sources, including hedge funds and institutional traders.
The capital raised is typically much larger than what a private limited company can achieve.
(Shane, 2003)

Widening the Shareholder Base and Spreading Risk: Offering shares to the public allows the risk
of company ownership to be distributed among a large number of shareholders. Early investors
can sell some shares while retaining a significant stake in the company.(Kirzner, 1973)

On another hand ,Diversification of ownership reduces dependence on a few angel investors.

Other Finance Opportunities: Besides share capital, PLCs are better positioned to explore
alternative sources of finance. Access to debt financing, loans, and bonds becomes more feasible
due to their public status. Growth and Expansion Opportunities: PLCs can fund expansion plans,
research, and development through capital infusion.(Burgelman, 1983).

Furthermore ,their financial stability attracts potential partners and collaborators. Prestigious
Profile and Confidence: Being publicly listed enhances the company’s reputation and
credibility.Investors and customers perceive PLCs as more stable and transparent.

In addition ,transferability of Shares: Shares can be easily bought or sold in the stock market,
providing liquidity to investors. This flexibility attracts more investors. Exit Strategy: Founders
and early investors can exit by selling shares in the market.(Kirzner, 1973)

This exit route is more straightforward compared to private companies.Disadvantages of a Public

Limited Company: More Regulatory Requirements:PLCs face stringent legal and regulatory
compliance. Reporting obligations include financial statements, annual reports, and disclosures.

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Furthermore, high Levels of Transparency Required: Public companies must disclose financial
information to shareholders and the public. Transparency can be challenging for companies with
sensitive data. Ownership and Control Issues: Shareholders’ influence increases, potentially
affecting strategic decisions. Founders may lose control over the company’s direction. (Shane,
2003)

Moreover, Vulnerable to Takeovers: Publicly traded shares can be acquired by other companies
or individuals. Hostile takeovers are a risk.Short-Termism:Shareholders often focus on short-
term gains, which may impact long-term planning. Balancing short-term profits with sustainable
growth can be challenging. Initial Financial Commitment Is Higher: (Shane, 2003)

However ,costs associated with listing, legal compliance, and investor relations are substantial.
In summary, while PLCs offer access to significant capital and prestige, entrepreneurs must
carefully weigh the advantages against the regulatory burden and loss of control. Consulting
legal and financial experts is crucial when making this critical decision.

Furthermore, let’s delve into the advantages and disadvantages of a Private Limited Company
(Pvt. Limited .. This business structure is a popular choice for many entrepreneurs due to its
unique features. Here’s a comprehensive overview:

In addition, Private Limited Company: An Overview. A Private Limited Company is a legally

formed entity that combines limited liability with certain restrictions on ownership. It is privately
held and typically suitable for small to medium-sized businesses. Let’s explore its advantages
and disadvantages: (Shane, 2003)

In addition, advantage of a Private Limited Company: No Minimum Capital Requirement:

Unlike some other business forms, a Pvt. Ltd. Company does not have a mandatory minimum
capital requirement for incorporation. Entrepreneurs can start with a modest capital base, making
it accessible for startups.

Furthermore, separate Legal Entity:A Pvt. Ltd. Company has its own legal identity distinct from
its shareholders. This separation ensures that the company’s debts and obligations do not directly
impact the personal assets of shareholders.: Shareholders’ liability is limited to the extent of their
shareholding.(Kirzner, 1973)

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Foe, assets remain protected, even if the company faces financial difficulties.Fund Raising
Opportunities: VT. Ltd. Companies can raise funds through equity shares, venture capital, or
loans. This flexibility allows them to expand, invest, or diversify their operations. Free & Easy
Transfer of Shares: (Sarasvathy, 2001)

How ever ,Shares in a Pvt. Ltd. Company can be transferred freely among shareholders. This
facilitates ownership changes without disrupting business continuity. Uninterrupted
Existence:The company continues to exist even if shareholders change or pass away.

Furthermore, Perpetual succession ensures stability and longevity. Foreign Direct Investment
(FDI) Allowed: VT. Ltd. Companies can attract foreign investment, contributing to growth and
global expansion. Builds Credibility: Having “Private Limited” in the company name enhances
credibility. It inspires trust among customers, suppliers, and partners .Disadvantages of a Private
Limited Company: (Burgelman, 1983).

In addition, Restrictions on Ownership:Pvt. Ltd. Companies cannot issue shares to the public.
Ownership remains limited to a select group of shareholders.Complex Compliance
Requirements:Pvt. Ltd. Companies must adhere to legal formalities, including annual filings,
board meetings, and financial audits. On-compliance can lead to penalties.(Burgelman, 1983)

.Through, higher Incorporation Costs:Setting up a Pvt. Ltd. Company involves registration fees,
legal documentation, and professional assistance. Initial costs may be higher compared to sole
proprietorships or partnerships. Less Privacy:Financial statements and company details are
publicly accessible. Shareholders’ information is part of the public record. Limited Exit Options:
Exiting a Pvt. Ltd. Company can be challenging due to restrictions on share transfer.(Burgelman,
1983).

On another hand , shares requires approval from other shareholders. In conclusion, entrepreneurs
should carefully weigh the pros and cons before choosing a business structure. A Pvt. Ltd.
Company offers a balance of limited liability, flexibility, and credibility, but it also comes with

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compliance responsibilities. Assess your specific needs, resources, and long-term goals to make
an informed decision. (Kirzner, 1973)

On another hand, Sole proprietorship, advantage and Disadvantages of Different Business

Forms. Cooperative:Advantages:Easy Formation: Co-ops can be established with a minimum of
10 adults, making them straightforward to create. Furthermore ,: Co-op members are also
owners, leading to increased motivation and commitment (Burgelman, 1983).

In addition ,open Membership: Anyone with a common interest can join or leave the co-
op.Limited Liability: Members share equal ownership and liability. Democratic Structure:
Managed based on “one member, one vote. “Reduced Taxes: Members are taxed only once.
Stable Existence: Co-ops continue to exist despite individual changes.

Furthermore , disadvantage Complex Decision-Making: Democratic structure can slow down

decision-making. Potential Conflict: Balancing diverse member interests can be challenging.
Limited Capital: Co-ops may face limitations in raising capital.On another hand, Sole
Proprietorship: Advantages: Ease of Formation: Simple setup process with minimal paperwork.
Less Financial Burden: Shared expenses and overhead costs. Direct Control: Full control over
business decisions. Pass-Through Taxation: Profits and losses flow directly to the owner’s
personal tax return (Kirzner, 1973)

Furthermore, disadvantage Unlimited Liability: Personal assets at risk.Limited Expertise: Sole

proprietors may lack diverse skills.Dependency: Business relies solely on the owner.Limited
Borrowing Capacity: Difficulty in accessing large loans. In addition, Partnership: Advantages:
Complementary Skills: Partners bring diverse expertise. Shared Financial Burden: Costs and
risks are distributed. Access to Contacts: Partners’ networks benefit the business. Work-Life
Balance: Partners share responsibilities. Moreover disadvantages: Shared Liability: Partners are
jointly liable. Conflict Potential: Disagreements among partners. Dependency: Relying on
partners’ commitment. Succession Challenges: Transitioning to new partners (Shane, 2003)

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In conclusion ,factors for Selecting Management Information Systems (MIS):When choosing an
MIS, consider the following factors: Usability: Ensure it’s user-friendly for all staff.
Visualization & Reporting: Analyze data visually and display results effectively. Security:
Protect sensitive data from loss, theft, and hacking.

References

1.Shane, S. (2003) A General Theory of Entrepreneurship: The Individual-Opportunity Nexus.

Edward Elgar Publishing: Cheltenham.

2. Kirzner, I.M. (1973) Competition and Entrepreneurship. University of Chicago Press:

Chicago.

3. Burgelman, R.A. (1983) Corporate Entrepreneurship and Strategic Management: Insights from
a Process Study. Management Science: Palo Alto.

4. Sarasvathy, S.D. (2001) Causation and Effectuation: Toward a Theoretical Shift from
Economic Inevitability to Entrepreneurial Contingency. Academy of Management Review: New
York.

5. Stevenson, H.H. & Gumpert, D.E. (1985) The Heart of Entrepreneurship. Harvard Business
Review: Boston.

6. Alvarez, S.A. & Barney, J.B. (2007) Discovery and Creation: Alternative Theories of
Entrepreneurial Action. Strategic Entrepreneurship Journal: Dallas.

7. Ardagna, S. & Lusardi, A. (2010) Heterogeneity in the Effect of Home Equity on Household's
Portfolio. The Quarterly Journal of Economics: Cambridge