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

Business organizations can be classified in a variety of ways depending on its size, sector, legal status etc.

Extracts from this document...

Introduction

Business organizations can be classified in a variety of ways depending on its size, sector, legal status etc. These classifications differ from one firm from another. Legal status has an important bearing on the environment in which the business operates. It is important to have a comprehensive knowledge of the advantages and disadvantages of the several legal forms so that managers and directors can decide which legal form their firm should adopt. The sole trader is the simplest business to develop and has very little legal formalities, obligations or constraints. A sole trader or sole proprietor is one who individually runs business with personal funds. Remaining as a sole trader has many advantages, mainly being that you are able to give a more personal service to your customers and you are able to make changes within your business very quickly due to there is little or no bureaucracy there being only one person to make the final decision. Other advantages include having complete control over the business and its profits. However, as the expansion of the business depends on the amount of capital you are personally able to inject, one may find investing in the growth of my business very difficult, as capital is often difficult to find. ...read more.

Middle

There is no Act that exists which sets out rules for settling partnership disputes. Limited companies branch into private limited companies and public limited companies (PLC). A private limited company is one that restricts the right to transfer its shares and limits the number of its members. A public limited company is basically the same as private limited company the chief difference is that shares of Plcs may be offered to the public for subscription. The company may apply to the Stock Exchange for permission for its shares to be listed, thus, providing an effective market for such shares. One of the major advantages of a limited company is that the shareholders are not liable for the company's debts beyond the amount of share capital they have subscribed. Another advantage of such a company is that it is easy to transfer the ownership, either wholly or partially, through the selling of all or part of its total shares. But he cost involved in forming a limited company is high. This includes the cost of capital such as duty on authorized share capitals, the cost of formation expenses such as professional fees, printing of articles of association, etc. ...read more.

Conclusion

to market its products. In a franchisee one can seek profits without direct foreign investment also it reducing competition by reducing competition by sharing technology. But it could be frustrating to work in a place where one has to operate it in accordance with systems and standards laid down by the franchiser. Also finding out about a franchise is a costly and time-consuming business. Therefore franchising is a complex area with many sources of potential conflict between the franchiser and franchisee, particularly regarding the terms of the franchise agreement. Leasing and joint ventures are other two legal forms similar to franchising. Licensing is when one country (the licensor) authorizes a firm in another country (the licensee) to use its intellectual property. Joint venture describes a jointly owned business venture involving more than one organization. Therefore when choosing a desired legal form firms need to realize the degree of personal liability as in sole trader, the willingness to share decisions as in partnership, the legal requirements required in limited companies and the need for separate identity as in a franchisee. In the end whatever legal status a firm undertakes it is ultimately the environment the business entity functions it that influences the decision of the manager or director about which legal form to choose and implement in their organization. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Business, Companies and Organisation, Activity 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 GCSE Business, Companies and Organisation, Activity essays

  1. Marked by a teacher

    Ownership, Aims and Objectives. In this assignment I have been asked to research a ...

    3 star(s)

    The main purpose of JW Buckley is to provide food and drink to the local people. They do cater for businesses but it is much more complicated than ordering a sandwich! It is easy to set up a business as a sole trade; you do not need to worry about

  2. English for business

    23 I'd like to apply for the job I' m 26 years old and I have graduated a course in Economics and Law. Last summer I acquired some professional experience working in the accountancy department of an office automation equipment company.

  1. Applied Business Unit 1

    The location is ideal for wholesalers and retailers as the surrounding businesses sell similar wholesale goods. This attracts buyers to visit and purchase their goods regularly from the same place. Nearby is the famous Petticoat Lane Market that attracts a lot of buyers and thus leads to them visiting the store.

  2. M&S and War Child are two different organizations, M&S is a private sector and ...

    So they can store information that is relevant for each country that has their own different needs, but still needs to be known for having good quality products at affordable prices. Social Factor Social and cultural influences on business vary from country to country.

  1. Business Studies

    Word of mouth: - Publicity where businesses have little or no control * Place/distribution > Place concerned with the process of distribution and availability of products - Distribution channels an reasons for intermediaries > Distribution Channels are the channels by which a product is moved from place of manufacture to

  2. Environment factors affecting business. An organizations environment is composed of numerous factors:

    The influence of consumer groups, trade unions, trade associations, environmental interest groups and various other independent groupings may also impinge on the success and survival of an organization. (C) Economic Factor Economic conditions in an environment will vary over time.

  1. Business studies - Business Plan

    day and I will be needed employees so I must be able to get along with them, I do not act rashly which will be important because I must wait for the right time in which to buy new machines as well as if I will expand into something more

  2. Business Plan. After putting a lot of thought into what kind of business we ...

    This means that there corporate image is a constructive and optimistic one. Companies often use slogans and catch lines so people can identify their product easily. Environmentally friendly Business activities can sometimes have an effect on the environment. For example, a new business could be set up in a derelict

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