Sony P.L.C. Essay Example

larger number of partners and their specialized skills.

Partnerships may be the optimal selection for commencing a business, contingent on the circumstances. These arrangements enable around-the-clock availability and guarantee continued operations in case one partner is absent due to illness or vacation. Nevertheless, partnerships remain accountable for boundless liability. Professions such as solicitors, doctors and accountants can become partners.

Before a company can start trading, it must undergo the registration process and after its paperwork is approved, it becomes a legal entity. Shareholders become owners of the company by investing money and directors can issue new shares by contacting the registrar of companies.

When the registrar gives approval, the authorised capital is established and only the shares sold to shareholders make up the issued capital. A company can choose to gradually sell shares through a series of calls, meaning they may issue less than their total authorised capital. Usually, it takes three or four calls for shareholders to fully pay for all their purchased shares.

Sony Corporation operates in over 200 countries and efficiently raises funds as a publicly traded company on the Japanese stock exchange. In contrast, private companies, which are usually smaller than public limited companies, require at least two shareholders and do not have a maximum limit. The purchase of shares is only possible with board approval and cannot be traded on the stock exchange. Boards of directors aim to protect shareholder interests.

The board of directors will appoint a managing director to oversee daily business operations. Private companies have an advantage over unlimited companies in raising funds through selling shares, while also providing limited protection for shareholders. Expanding organizations can benefit from internal economies of scale,

which lead to increased efficiency and productivity by lowering average production costs as output increases.

External economies of scale are observed in industries where organizations operate, and these economies can be experienced by organizations as the industry grows. External economies are concentrated in specific regions such as steel in Sheffield, shipbuilding in Newcastle, and textiles in Lancashire. These external economies may also be known as economies of concentration.

Having large economies of scale is advantageous for Sony P. L. C.

A decrease in economies of scale would result in a decrease in profit margin for Sony P. L. C.

Small business entities such as sole traders or partnerships lack the capacity to handle economies of scale like those of multinational corporations such as Sony, which would prevent them from manufacturing electronic products.