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business studies coursework

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Introduction

Business Studies Coursework 2 Legal Structure of the Business When setting up a business a person has to decide on which type of business the organization should take. This decision depends on various factors like how many people are going to own the business, what risks the owner is prepared to make, and weather it will be a limited or unlimited company etc... There are six types of businesses, which an organization can take. These are: 1. Sole proprietor 2. Partnerships 3. Franchise 4. Multinational/Conglomerate 5. Limited Companies - PLC`s 6. - LTD`s 1. Sole proprietor: A sole proprietor is a business owned by a person alone. This person keeps all the profits of the business but has unlimited liability. This means that the owner has to pay for any debts of the business, even if he has to sell his house and other valuable personal possessions. A sole trader is also a tertiary business. The Advantages: * A sole trader can set up in business immediately. There are very few complicated forms to fill in or procedures to set up. * The owner is in sole charge and doesn't need to get the agreement of other owners to make changes to the business. Lawyers and accountants don't have to be employed. * The owner can make all the decisions by himself without having to get the agreement of partners, directors and managers of the business. * The amount of money needed to set up a sole proprietor is as little as �1. ...read more.

Middle

4. Multinational/Conglomerate: A multinational is a large company, which operates and sells products and services in more than one country. A conglomerate is a company, which makes and sells different products and services. Advantages: * More customers in different countries. * They receive additional profits. * Have local subsidiaries. * Have local knowledge. * More range of product to sell for a conglomerate no risk of failure is reduced. Disadvantages: * The distribution of stock can become difficult. * Controlling the subsidiaries is hard and costly. * Communication and translation is hard. * Workers might be cheap to employ but local customers may not be able to afford the service. * Taxation and protection to stop multinationals from selling to many products so making local producers lose out. 5. Limited companies: Most limited companies have two or more owners. The owners are all called shareholders. This is how the ownership of the company is decided. Limited companies are usually family owned businesses. They have limited liability this means that if the company goes out of business leaving debts the shareholders will only lose the money they have put into the company and they won't be forced to sell off there personal possessions. The more shares a person owns the more say they have in how the company is run. If a shareholder decides to sell off his share he needs to get permission from all other shareholders. Any financial accounts are not private and have to be published. ...read more.

Conclusion

2. There may not be anyone who will carry on managing my business after I retire. I have spoken to family relatives who were interested in taking over the business in a few years. If this plan falls through I will then try to sell my business. 3. If I become ill for a long period of time my business may suffer. As this is highly unlikely to happen to me within the next 20 years, as I am still young I am not worried. If so I have a supportive family who I know would be willing to help me out. 4. A lot of sole traders tend to have very long hours in my case I plan to employ an assistant who will be able to help me out, which will reduce the work load. 5. I may have problems raising starting up capital. This should not be a problem, as I don't expect my business to require a lot of money. 6. I will require products in order for my business to run and the cost of buying products can become expensive therefore I will order in bulk which will reduce costs. 7. As a sole trader I may have to do other jobs like accountancy. This fact does not bother me, as I don't mind diversification. I have to take each disadvantage into consideration and I have tried to make them least inconvenient as possible. Overall I think being a sole trader will be to my advantage, as the advantages will help me gain from my business. ?? ?? ?? ?? ...read more.

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