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Exploring business purposes

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Introduction

Exploring business Purposes In this assignment I will be describing the propose, ownership, advantage and disadvantage of four types of organisations. The four Organisations I have chosen are: * Sole Trader * Partnership * Private limited company * Public limited company 1. A Sole trader can be a mobile hairdresser who will provide a service. A Sole trader is an individual who is responsible for supplying or borrowing all the money required by the business and for actually running the business on a day to day basis. The most common sorts of sole traders are craftsmen and women. Sole traders business covers a very wide range of activities The advantages of being a sole trader are: * There are no particular legal formalities to complete before Commencing to trade * No legal requirements governing the layout of the accounts * annual accounts do not have to be audited * the owner has the freedom to run the business in his or her way. ...read more.

Middle

The advantages of a partnership are: * It is easier for partners than sole traders to raise capital because all of the partners can pool their resources. * Partners can arrange to cover one another at time of illness or holidays * Partners can share their expertise and their workload. * A partnership like a sole trader does not have to publish its accounts or have them audited. * Additional capital can be raised by introducing more partners into the partnership. The disadvantages of a partnership are: * Each partner is personally liable for all of the firms debts * Partnerships can only raise limited amounts of capitals as compared with businesses. * Decision- making can be show since all partners have to be consulted. * The death on retirement of a partner can bring a partnership to an end if such a rule is written into the deed of partnership. * Disagreements can arise between partners about the amount of effort that each of them puts in. ...read more.

Conclusion

These companies are allowed to raise capital by selling their share on the stock exchange. This gives them a greater flexibility in raising capital. They still only need two people to form a public limited company and there is no stated maximum number of shareholders. The advantages of a public limited company are: * Shareholders have limited liability * Suppliers tend to feel more comfortable trading with legally established organisations * It is easier to raise capital through shares * The ill health or death of shareholders does not affect the running of the business. The disadvantages of a public limited company are: * All the affairs of the company are made public through the audited accounts and annual returns that the company makes * Employees and shareholders are distanced from one another * Decisions tend to be slow since there are a number of people involved. Name of business The type of business Size Scale Tesco Public limited company Large business international Solicitor Partnership Small business local Mobile hairdressers Sole trader Small business local Northill stores Private limited company Small business local ?? ?? ?? ?? Nosheen Sadiq 9th October ...read more.

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