Business ownership of Tesco and Nokia

Authors Avatar
Business Ownership

There are several different types of business ownerships. Depending on the type of ownership, the owners have different responsibilities and involvement in a business. One aspect of this is who bares the business risk and whether the owners have limited or unlimited liabilities. Different types of owners are:

* Sole trader

* Partnerships

* Co-operatives

* Franchise

* Public sector

* Company

- Private Limited Company

- Public Limited Company

Sole Trader

There are many businesses in the UK which are sole traders. The owner has complete control of the business, and is totally responsible for its success or failure. Running your own is business in extremely hard work because you working on your own. The risks are great, but so are the rewards in job satisfaction.

Advantage

There are many advantages of a sole trader and the main one is that the owner keeps all the profits. Though the owner must save enough money to pay tax, interest charges on loans and Vat. It is simple and inexpensive to set up as sole traders as start up costs are usually low. However, before starting your own business you must notify the income tax authorise and the department of social security, as you will be taxed and will pay self employed national insurance contributions. The business will be very flexible because if the business is not profitable, the owner has the choice to close. Also the working hours and days worked can be flexible.

Disadvantage

There are also disadvantages of a sole trader. One example is unlimited liability. This is when owners are personally responsible for all the debts of their business. So this risk of being a sole trader is high because there are chances of failure as there will be competition. The owner will need money when running a business so it will be difficult to raise capital. However the government schemes have made this somewhat easier as they provide grants to help them in their business. The firm's growth is often slow as one person can do only a limited amount of work. The owner may have no experience of running a business or have any business skills therefore it will be difficult to start a business. If the owner is ill this can create problems and also if the business is closed, then expenses continue but no money is being made. A sole trader must register the business with the Inland Revenue and is responsible for keeping accurate business accounts and completing an annual self assessment tax form. If the owner dies, then the business comes to an end as there is no one else to run the business.

Partnership

A partnership is when two - twenty partners control and finance the business. They are operating a business as joint owners.

Partnerships are relatively small. They include accountants, dentists and estate agents. Many partnerships exist in professions where the professional exist in professions where the professional body insists that members are personally responsible for their actions.

There are also a few larger organisations which are run on a partnership basis where the employees become partners when the join the company. The largest company of this type is the John Lewis, where all the staff who works for John Lewis and Waitrose supermarkets are classed as partners and receives a share of the profits as a bonus each year.

Advantages

Partnerships can be set up in any kind of business, and are found in the retail trade and among small firms in the services sector.

Partnerships provide the business with a range of skills which can specialise in their own areas and increase the range of services they offer to customers. In a firm such as solicitors, one partner might specialize in wills and trusts; another in criminal law; and a third might be in criminal law. As there are more than two people involved in the business, the partnership may have more profitable ideas than a sole trader. Also, it will be easier to raise money as each partner contributes a share. If an expansion was taking place it would be easy to obtain start up capital and raising money for expansion as all the partners contribute.

Disadvantage

Although some partnerships have worked successfully for years, there are probably more chances of argument in partnerships than in any other form of business organisation. Therefore that is a reason why there is a `Deed of partnership`. This is a legal document which covers such matters as who provides the capital, control of the business, distribution of profits, settling disputes, etc. So this document covers all possible points of disagreements that could arise.

When you form a partnership, you must remember that all the partners are legally responsible for partner's ship's debt. This includes sleeping partners, who invest money or lend their name to the partnership, but take no part in its management. Also in law, partners are liable for the actions of each other. For example, if one partner ran up large debts and the disappeared, the remaining partners would be responsible.

In partnerships, partners are self-employed similar to sole traders, so they must register their business with the Inland Revenue to keep accurate accounts and complete self-assessment tax forms.

Partnerships have unlimited liability, so they are responsible for all the debts of the business.

Co-operatives

A co-operative is different from any other type of business. It is owned and run by the whole work force. The owners of the co-operative business try it on democratic principles and sometimes support local events. There are three different types of co-operative businesses and these are:

* Worker co-operative

* Consumer co-operative

* Marketing co-operative

Worker co-operative

A worker co-operative is different from any other type of business. It is owned and run by the whole work force. Its members believe in working together for a common purpose. It tries to ensure that everyone has a say in how the business is run. In a worker co-operative membership is open to all workers. Any profit made is distributed to members in a fair way. Members are in control, not outside shareholders, though some workers co-operative employ a general manager. The workers co-operative would reduce conflicts because the worker and the owner is the same person. Members would have a greater sense of responsibility and work harder to make the business succeed.

Working in the business would become more enjoyable and provide greater job satisfaction. Increased motivation among the workforce would provide better goods and services.
Join now!


As local people are involved in the business, the co-operative would have closer links with the local community.

Consumer co-operative

Co-operative societies have more than 8 million members and a turnover of £7.5 billion a year. However, they still have many smaller shops that find it difficult to compete with big supermarkets. These local stores are kept partly for idealistic reasons, as some of their older or less well-off customers find it impossible to visit out of town stores.

Marketing co-operative

There are also the marketing co-operatives. Marketing has always been a problem ...

This is a preview of the whole essay