Some Facts About Astaphans
LEAFLET No. III
Judging from the discussions we havehad with members of the public on "Asta-
phans Goes Public" two questions seem by implication to arise: bluntly put they are :
the fact that we are going public is indicative of a "catch" somewhere; and that in
view of the increased competition in the self-service business and investment in Asta-
phans will not be profitable. Though in the previous two information leaflets we have
touched broadly on these issues, we consider these issues sufficiently important to deal
with them in depth in this and subsequent information leaflets.
The idea of a public company or corpo ration seems fairly comprehensible to most
of the people who have come to us withquenies. An idea which might have been
novel a few years back is no longer so today, for in these years public Companies
such as Dom-Can Timbers, etc. have appeared on the scene. What appears novel, how-
ever, is the fact that a firm which was previously a private-family owned business
enterprise is now going public. The idea is indeed new to Dominica but it is a com-
monplace feature in the advanced and more advanced of the developing countries. The
fact that Astaphans is the first to do so in Dominica should be no cause for worry nor
surprise. Indeed this step is properly in keeping with the innovativeness characteristic
af Astaphans. We were the first to bring you the Supermarket and the Shopping Centre
(despite the predictions of the prophets of doom that we would fail). We have been the
first to adopt modern management techniques (we boast of a personnel management
department) and we have been the first to practice a purposeful policy of diversifica-
tion in order to increase the profitability of our firm.
In order that you may better understand why we decided to go public we must
perforce describe to you the basic forms of ownership which a business organisation
can take and which are in use today. We shall briefly explain the advantages and dis.
advantages of some of the following. These forms of ownership are:
1. Sole proprietorship
3. Joint-Stock Company. (Private anl Public)
4. Cooperative society
5. Business Trust.
A business owned and operated by one person is known as a sole proprietorship.
In Dominica as elsewhere it constitutes themost popular form of business ownership.
In the United States, Canada and in the United Kingdom, the sole proprietorship ac-
counts for between 70- 75 per cent of business ownership. In Dominica it probably
accounts for between 90-95 of all business forms of ownership. The advantage of this
'orm of business is that it is simple to start, the owner receives all the profits and the
)wner has freedom to manage.
The private owner or manager is called in economic language an entrepreneur and
;he function of making policy decisions is known as entrepreneurship.
But of course there are disadvantages and to our mind these far outweigh the
advantages, hence the reason why several years ago we decided to incorporate ourselves
into a private Company. The disadvantages are:
Unlimited liability of owner for business debts.
Difficulty in raising capital.
Overall direction may become a burdenon owner when business grows;
Limited opportunity for employees since organisation may not be permanent;
Uncertainty of duration! Death, insanity or imprisonment automatically termin-
ate the firm, and the business is liable fordeath and inheritance taxes.
A partnership is a slight improvementon the sole proprietorship and it may be
defined as an association oftwo or more persons to carry on as owners of a business
for profit. The partnership was devised toovercome certain weaknesses inherent in
the proprietorship. The advantages of thepartnership are better credit standing,
provision of larger capital resources and allowance for specialization of management
skills. However the partners' liability forthe debts of the business are still unlimit-
ed; the duration of the partnership is limited to the life of the partners and a new dis-
advantage is that the transfer of a partner's capital investment is restricted i.e. it is
subject to the approval of the other partner or partners. In passing we must point how-
ever, that partnerships have worked out particularly well in the professions of Law,
Medicine, Dentistry, Accountancy and Conulting Agencies, and some large firms like
Procter and Gamble originally began as Partnerships.
Next week we shall discuss the publicand private Company referred to in busi-
aess parlance as the Joint-Stock Company.