• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Private sector businesses.

Extracts from this document...

Introduction

Private Sector Businesses Sole Traders Sole traders are the smallest type of enterprise. This type of business is owned by one person, although he or she may employ other people to work in the business, he has complete control over the business and takes home all the profits. A sole trader is someone who decides to own and run his or her own business and most probably uses her own saving as capital to start it up. This type of business is easy to set up and there are no formal procedures to follow. Advantages: * If the firm is successful then the owners reward is the profit. * Ideally suited for offering a personal service to customers. * Bad (unpaid) debts can be avoided as the customers are usually known to the owner and most transactions are usually for cash rather than credit. * The sole trader can be flexible as to which days to work and working/opening hours. * Unlimited liability means a lot less paper work because they don't have to pay corporation tax. Disadvantages: * Long working hours. * Illness and sickness can cause problems to the business - when closed it makes no money. ...read more.

Middle

Instead the company goes into liquidation. So anyone who lends money or sells goods on credit should check that the business they are dealing with is financially sound. 2. Provide a better image to their customers, who are likely to assume the business is well established and more secure (whether it is or not!). A private limited company issues share to its owners. Each share represents a share of the company and each share equals one vote. Therefore a shareholder with more than half of the shares can out vote the other shareholders. For this reason, the proportions held are often carefully thought out. Advantages: * The business can still stay small - many private limited companies have only three or four shareholders (the minimum is one director and one shareholder - there is no upper limit to the number of shareholders). * The owners or shareholders usually work in the business everyday and have a vested interest in its success. * The shareholders are often directors also - and responsible for the running of the business. * It is relatively easy to start up a private company. In some cases the owners may only invest �100 or �200 each to start with. ...read more.

Conclusion

* An annual general meeting (AGM) must be held each year and all shareholders must be invited. Shareholders who do not agree with the way the company is managed may raise objections or vote against a proposal made by the directors. * Specific account must be prepared each year and these must be audited. Moreover, the accounts must be published so a 'problem year' cannot be hidden. * Shareholders will expect to receive a dividend for their investment. They will also want their shares to increase in value. If the company has a poor year or if the stock market performs poorly and the shares fall in value, the shareholders will be tempted to sell, further depressing (lowering) the price. This makes the company vulnerable to a take-over bid as it is then relatively 'cheap' to buy. * The shareholders may have little interest in the long term prospects of the company and simply be interested in quick returns on their investment. In these cases their interests are different to those of the directors, who may be looking at the long term security of the company. * The original owner(s) may lose most of their control over the company, even if they retain a substantial number of shares. Sir Richard Branson bought his company back from public ownership because of this! By Laurence Osborne ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Structures, Objectives & External Influences section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Structures, Objectives & External Influences essays

  1. The Business Environment Coursework. Describe the type of business, purpose and ownership of ...

    Logistics - transportation and storage of goods Property - buying, selling and renting properties. Can also include facilities management where they are in charge of looking after the sites, this would mean they work closely with maintenance and health and safety.

  2. I have identified four contrasting businesses they are as follows: KFC John Lewis ...

    This means everything gets done the way the owner wants it to be done. > The owner gets to take all the profits that are made from the business after all the expenses have been paid. > The sole trader can be flexible with working hours as well as opening hours and which days to work.

  1. For my portfolio, I was asked to do an assignment on two businesses. I ...

    They can be easily expanded as many thousand of people and organisations may buy shares in the company. Very large public companies can often operates more cheaply than small companies as they operate on economics of scales for instance, they can mass produce goods for sales and buy in bulk to save money.

  2. Introduction to J Sainsbury plc

    Sainsbury's organisation's culture is very much concerned with the way in which people in Sainsbury's interact with each other and the typical patterns of interactions that have been developed over time. The culture of Sainsbury's describes the typical approach within the organisation.

  1. Investigating Businesses

    This will give the business a good reputation and therefore lead to a successful business. Mission Statement This is often simple, memorable and explains what the organisation is in business to do and what it wants to achieve. Mission statements express the organisation's objectives in qualitative terms and many businesses

  2. Investigating Business. Tesco PLC. I will be describing the aims and objectives of ...

    to customers, and promotion is an important factor as it helps make Tesco?s products & services more aware to the customers so that they can make their decisions in buying them. And Enterprise Skills are important factors as it allows Tesco?s to expand their business, e.g.

  1. Political, legal and social factors impact on businesses The two businesses I will compare ...

    This is basically an act of parliament which relates to 'goods' been sold and bought. It includes conditions like if the price is not agreed the buyer will be required to pay a reasonable price. There are seven parts of this sales and good act contract which all need to

  2. Applied Business. Investigating a business Preston Manor High School

    The school will have to pay for their facilities themselves and may have to compromise with reduction of budget by controlling how much facilities they purchase which will affect their reputation as to not being able to provide high quality education due to not enough facilities and resources and this

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work