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

Types of Business and ownership.

Extracts from this document...

Introduction

Type of Business There are different methods of classifying a business and one method is by sector. Businesses have traditionally been split in to two sectors, public and private sector. Public sector This sector comprises government owned or government controlled bodies including: * Public corporations as the Post office * Government departments * Local authorities such as the police and fire dep. Private sector This sector comprises businesses that are directly or indirectly in private ownership. This sector accounts for most businesses operating within the UK. Private sector businesses include: * Sole traders (one person businesses) * Partnerships (groups of people in a business) * Co-operatives (groups of people 'clubbing' together for a specific purpose e.g. A farmers co-operative set up for producing and selling grain) * Franchise operations (where a trader can 'buy' a name and set up a bushiness which is already established and used by other independent operators) * Limited companies (a limited company is a body owned by shareholders set up to do business. The Bank of Cyprus (London) ...read more.

Middle

Limited companies are run by directors who are appointed by the shareholders. The board of directors, headed by a chairperson, is accountable to shareholders and should run the company as the shareholders wish. If the company's performance does not live up to shareholders' expectations, directors can be 'voted out' at an Annual General Meeting. Whereas sole traders and partnerships pay income tax on profits, companies pay corporation tax. A limited company will either be: * A public limited company (Plc), or * A private limited company (Ltd Public limited companies (Plc) This type of limited company tends to be larger than a private limited company. There are around 500,000 limited companies in the UK but only 3% are Plc's. However, they contribute far more to national output and employ far more people than (Ltd) companies. The main difference between a PLC and a private limited company is that a PLC can sell its shares on the Stock Exchange to members of the general public and can, therefore, raise significantly more finance than a private limited company. ...read more.

Conclusion

Advantages: * Shareholders have limited liability. As a result more people are prepared to risk their money than in a partnership, for example. * More capital can be raised as there is no limit on the number of shareholders * Control of the company cannot be lost to outsiders. Shares can only be sold to new members if all shareholders agree. * The business will continue even if one of the owners dies. In this case shares will be transferred to another owner. Disadvantages: * Profits have to be shared out amongst a much larger number of members. * There is a legal procedure to set up a business. This takes time and also coasts money. * Firms are not allowed to sell shares to the public. This restricts the amount of capital that can be raised. * Financial information filed with the Registrar can be inspired by any member of the public. Competitors could use this to their advantage. * If one shareholder decides to sell shares it may take time to find a buyer. ...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. Marked by a teacher

    ASDA's Ownership

    4 star(s)

    It is usually common for a Sole Trader to use their personal savings as capital to start up their business. A Sole Trader has total control of their business and is therefore in charge of any debts they encounter. However, if the business is successful, they receive a lot of

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

    Culture Cafe started as a sole trader and then became a private limited company. They are now a community interest company. This means they work with the community in mind and use profits to help the community, but they still hope to make profit and their structure is very similar to the way a private limited company works.

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

    According to children's and young person act 1991 it is illegal to sell tobacco to customers under 16 and they cannot sell alcohol to the customers under the age of 18. Environmental issues As Tesco is expanding more it has to ensure that they are not spoiling the environment.

  2. Btec National Business Level 3 Year 1 - Exploring Business Activity

    Strategic planning process Quantitative analysis of current situation: Quantitative analysis is based on numbers. It is to assist in the making an appropriate plan. For example, if Oxfam costs are lower than those of rivals that they can undercut their prices, or make more profits from the same volume of sales.

  1. Explain the purpose of keeping accurate financial records.

    year the stock will be reflected at the most recent cost prices. Accruals This is an amount due in the accounting period which is unpaid at the end of that year. In the final accounts an accrued expense is: * Added to the expense, shown in the Trial balance, before listing it in the profit and loss.

  2. Departments and their roles within a business.

    because they will have to tell and inform the customers. For this process of communication to work effectively both functional areas are going to have to build relationships between them, making it easier to work alongside each other and communicate.

  1. Vodafone Plc

    The Financial accounting function is responsible for keeping the records for e.g. money paid in to the business and gone out.( e.g. employees, payments etc). The Management accounting function is the improvements which could be done to the business for e.g.

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

    products like drinks/ chocolates then the club card can notice this shopping habit and offer discounts/ promotions that they can use in future purchases. This marketing activity has contributed to the success of Tesco?s because customers of Tesco?s have remained loyal ? the reason why is that customers are satisfied

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