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What is the difference between a cooperative and a public limited company?
Kalulus
A public limited company is owned by its shareholders. The number of shareholder can range from just two or a handful of shareholders who own 100 per cent of the company, right up to many millions of shareholders who may be spread across many different countries. In these firms it is impossible for all the shareholders to manage and run the business from a day to day so they usually appoint a board of directors to do this on behalf. Ordinary shareholders have voting rights to elect directors and to vote on company policies. The more the ordinary shares a shareholder owns, the more votes they have.
In contrast, a cooperative is owned by its members. Any person can become a member by buying a share and each member is only allowed one vote regardless of the number of shares they hold. Members can vote on business policies and the election of a board of directors. In worker cooperatives, the workers in the business organization are its member or shareholders.
The sale of shares in the ownership of both public limited companies and cooperatives helps these businesses raise money to finance their activities. Cooperatives usually only sell shares to people who shop or work in their business A public limited company, however, can advertise and sell shares to other companies and member of the general public through a stock exchange. As a result, it is often very expensive to set up a public limited company.
Any profits made by a public limited company are owned by its shareholders. Profits after tax and not reinvested in the business will be redistributed to shareholders as dividend. Each share is paid a dividend from the profits, so the more shares a shareholder owns the greater the total dividend or share of profitthey will receive. In the same way, the profits of a cooperative are distributedto its member. In retail cooperatives, profits may also be used to lower prices for members to enjoy.
Wiki User
∙ 11y ago
Blessings Chabala
What is the difference between public limited company and public cooperative
philip muchesia
cooperatives have 10-infinite members while public have 7- infinite members
Anonymous
Limited company has limited
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