The Importance of International Trade, Economic Integration and Global Markets to Uk Business Organisations.
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- Category: Politics: Economics
- Date Submitted: 07/14/2014 07:57 AM
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Task 1.1 Identify the purposes of different types of organisation.
Main types of business organisation:
Sole trader
Partnership
Private Limited Company (“Ltd”)
Public Limited Company (“Plc”)
Co-operatives
Franchises
Public sector ( HMRC, NHS, Police)
Sole trader - A sole trader is a business that is owned by one person. It can have one or more employees. In the UK is the most common form of ownership.
ADVANTAGES:
- Total control of the business by the owner;
- Cheap to start;
- Keep all the profit.
DISADVANTAGES:
- Unlimited;
- Difficult to raise financing;
- Can be difficult to specialize or to enjoy economies of scale;
- The problem with continuity if sole trader withdraws or dies.
Partnership - Business where there are two or more owners of the enterprise.
Most partnerships have between two and twenty members though there are examples like the major accountancy firms where there are hundreds of partners.
Advantages of Partnership:
- Spreads the risk across more people, so if the business gets into difficulty then the are more people to share the burden of debt;
- Partner may bring money and resources to the business;
- Partner may bring other skills and ideas to the business, complementing the work already done by the original partner;
- Increased credibility with potential customers and suppliers – who may have dealing with the business as less risky than trading with just a sole trader.
Disadvantages of a partnership:
- Have to share profits;
- Less control of business for individual;
- Disputes over workload;
- Problems if partners disagree over of direction of business.
Private Limited Company and Public Limited Company - Business owned by shareholders. Run by directors (who may also be shareholders). Liability is limited (important).
Differences between a private and public limited company are:
- Shares in a Plc can be traded on Stock Exchange and can be bought by members of general public.
- Shares...
Main types of business organisation:
Sole trader
Partnership
Private Limited Company (“Ltd”)
Public Limited Company (“Plc”)
Co-operatives
Franchises
Public sector ( HMRC, NHS, Police)
Sole trader - A sole trader is a business that is owned by one person. It can have one or more employees. In the UK is the most common form of ownership.
ADVANTAGES:
- Total control of the business by the owner;
- Cheap to start;
- Keep all the profit.
DISADVANTAGES:
- Unlimited;
- Difficult to raise financing;
- Can be difficult to specialize or to enjoy economies of scale;
- The problem with continuity if sole trader withdraws or dies.
Partnership - Business where there are two or more owners of the enterprise.
Most partnerships have between two and twenty members though there are examples like the major accountancy firms where there are hundreds of partners.
Advantages of Partnership:
- Spreads the risk across more people, so if the business gets into difficulty then the are more people to share the burden of debt;
- Partner may bring money and resources to the business;
- Partner may bring other skills and ideas to the business, complementing the work already done by the original partner;
- Increased credibility with potential customers and suppliers – who may have dealing with the business as less risky than trading with just a sole trader.
Disadvantages of a partnership:
- Have to share profits;
- Less control of business for individual;
- Disputes over workload;
- Problems if partners disagree over of direction of business.
Private Limited Company and Public Limited Company - Business owned by shareholders. Run by directors (who may also be shareholders). Liability is limited (important).
Differences between a private and public limited company are:
- Shares in a Plc can be traded on Stock Exchange and can be bought by members of general public.
- Shares...