• 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...


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.


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.


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

    It was said that people could walk to any room where other people are gathered and know with certainty that the majority of students or business people would be using their software's on Mobile, PDAs, handheld laptops etc. However, by the 2001 many consumers enjoys and desire to become more

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

    � A customs and Revenue office are a government department, but has agencies that run under them with a smaller degree of control. For examples the Tax credits agency. � The business purpose is to provide the service in a cost effect efficient way and not to make profit.

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

    The method of producing cards in Vectone Gnanam Telecom Special printing paper is purchased Special printing paper is installed in the machine The chief programmer installs the programmer in the printer The card is printed The card is activated to the mainframe computer The agents purchase the card Agents distributes

  1. Departments and their roles within a business.

    that the marketing department will have to change campaigns and promotions and set higher prices. Lacks of communication during these stages are crucial because they can lead to the marketing department keeping prices the same and then selling products at a far lower price than they should.

  2. Barclays Investigating a Business

    over the course of 3 years to this programme which helps deaf and hard of hearing people to gain the IT skills needed to compete in the labour market. * RNIB - Talk & Support - Barclays is providing �1.29 million over 3 years to offer telephone support and counselling

  1. Introduction to Business Assignment

    > 3.2 To Increase Levels of Service - They are doing this by for example opening earlier and closing at later times so that their customers have longer shopping hours and more time to buy. They are also improving levels of service by ensuring that their employees are better trained

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

    Tesco?s can learn from this and improve the shopping Experience of its customers. This Marketing Activity has contributed to the success of Tesco?s as it helps them to reach their aim ?To be the most highly valued business in the world?, because when Tesco?s analyses the feedback they receive from

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