As I have mentioned before Tesco is a public limited company


As I have mentioned before Tesco is a public limited company; A public limited company or PLC is any business who sells their shares on the stock market. In order for anyone to buy a Tesco share one has to pay a minimum of 209p(£2.09p)-(Tescos current share price as of 18/10/18). Once someone has bought a Tesco share they then become a Tesco shareholder. Shareholder money is invested into Tesco, the money is used to try and better Tescos services as well as obtaining good market research which will help Tesco to create strategies which should lift Tesco above any other competitors. Every year shareholders are invited to an annual meeting in which Tesco share their performance over the year as well as any changes to pledge to make, shareholders are notified on every move Tesco make. A shareholder is vital to a business like Tesco as they are given the power to vote for future directors as well as re-electing old director. Over time Tesco has to pay its investors back, however the amount Tesco pay, is dependent on their share price, this is calculated by comparing the demand for a product to the supply required, if the demand is higher than the supply Tesco’s share price will increase this will mean that Tesco investors receive a higher amount of money. Investors may also receive compensation if Tesco carrying out lawful activities such as the 2014 accounting scandal. According to the telegraph,Senior accountants tried to cover up pockets in Tescos accounting statement by using “aggressive accounting” a term given to Tescos accountants by many newspapers including The Telegraph as accounts made Tesco to be look “more wealthier” than they actually were, this led to a investigation led by the FCA-financial conduct authority-into Tesco figures. A “compensation agreement” was soon agreed upon which stated that anyone shareholder who invested between end of August to the middle of September was to be given compensation in the form of a 4% increase in interest for investors in the retail market, however to qualify for this compensation shareholders have to invested “more money than they lost in losses.

One of the reasons Tesco is a plc is due to the fact of the enormous international business scale which overcomes the ability for a single owner or partners to continuously put capital(money) in the business for it to become successful. Instead, Tesco is owned by thousands of shareholders, this means allows Tesco to raise funds easier as means that fundraising is n’t dependent on one individual. Investors are always taking gambles, Tesco is a particularly intriguing investment for people as investors, as they don’t lose more money than they have put inserted into the business even if they business was to become bankrupt concept, is known as having a Limited Liability. Over time Tesco has to pay its investors back, however the amount Tesco pay, is dependent on their share price, this is calculated by comparing the demand for a product to the supply required, if the demand is higher than the supply Tesco’s share price will increase this will mean that Tesco investors receive a higher amount of money. On the other hand, Investors may suffer a loss if external factors such as natural disasters ie Earthquake occur as Tesco shops around 13 countries in the world as well as countries like Japan that experience 9.0 earthquakes in Earthquakes and natural disasters can be catastrophic to Tescos business health as natural disasters affect countries as well as global economy. One of the reasons Tesco is a plc is due to the fact of the enormous international business scale which overcomes the ability for a single owner or partners to continuously put capital(money) in the business for it to become successful. Instead, Tesco is owned by thousands of shareholders, this means allows Tesco to raise funds easier as means that fundraising is n’t dependent on one individual. Investors are always taking gambles, Tesco is a particularly intriguing investment for as investors, they receive “legal protection” so they don’t lose any more money than they invested in the business even when the business goes the bankrupt, this concept known as having a Limited Liability all PLC have this legal protection, therefore company is liable for it losses and not its Investors.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now
x

Hi!
I'm Crystal!

Would you like to get a custom essay? How about receiving a customized one?

Check it out