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Types of Business Ownership

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Introduction

Types of Business Ownership JCC Limited is a private limited company. Other forms of business ownership include: The sole trader. This is the most common form of private sector business. This type of business has one owner who runs the business and may employ any number of people to help. Advantages of being a sole trader include the lack of legal restrictions, the sole trader is able to set up their business relatively quickly. Also all profits after tax are kept by the owner. There are a number of disadvantages to being a sole trader though, the main one being that sole traders have unlimited liability. This means that if the business gets into heavy debts then the owner is solely accountable and could be forced to sell personal possessions to cover these debts. Partnerships. A partnership made up of a number to people (between two and twenty). The members of the partnership share the responsibility of running the business and also share any profits the business makes. ...read more.

Middle

Private Limited Companies, JCC Limited is a private limited company. These types of business tend to be smaller than PLC's. Like PLC's private limited companies have limited liability. This means that the owner, Mark Du Jardin in the case of JCC Ltd. can only lose what he has originally put into the business. The shares within a private limited company can only be brought and sold privately and cannot be advertised for general sale on the stock market. As the only shareholder Mark Du Jardin must agree on the transfer of shares. Private limited companies are often family run businesses, such as JCC Ltd. As Mark Du Jardin is the sole shareholder and therefore he owns the entire business. Control of JCC Ltd. cannot be lost to outsiders as the shares cannot be brought be the general public, also there is the opportunity for more capital to be made by the company as there is no limit on the number of shareholders, but it is unlikely outsiders will be offered shares as the Du Jardin's want to keep the business in the family. ...read more.

Conclusion

There is a lot more formal documentation for JCC Ltd. as it is a private limited company rather than if it were a sole trader or a partnership. When forming a private limited company two documents must be produced. The first is the Memorandum of Association this must include: * The name of the company * The name and address of the company's registered office * The objectives of the company * The amount of capital to be raised and the number of shares to be issued The second document that must be produced is the Articles of Association this must include: * The rights of the shareholders depending on the type of shares they hold * The procedures for appointing directors and the scope of their powers * The timing and frequency of company meetings * The arrangements for auditing company accounts If these two documents are successful the company will be awarded the Certificate of Incorporation which allows it to trade. The company must submit a copy of its annual accounts to the Registrar each year. Ryan Newman ...read more.

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