Types of Organizations

Content Types of Organizations Sole Traders Partnerships Companies Cooperatives Franchising

The Private Sector Outline Types of Private Sector Businesses Cooperatives Sole Trader Limited Companies Partnership Public plc Private Ltd

The Sole Trader/Proprietor This is the most common form of business organization. One person provides the finances and in return, has full control of the business and is able to keep all the profits. Identify some of the advantages…………

The Sole Trader/Proprietor Advantages It is easy to set up and has no legal formalities. The owner has complete control The owner keeps all profits. He/she is able to choose times and patterns of working. The business can be based on the interest and skills of the owner

The Sole Trader/Proprietor Identify some of the disadvantages…………

The Sole Trader/Proprietor Disadvantages Unlimited liability – all of the owner’s a assets are potentially at risk. He/she often faces intense competition from bigger firms, for example, food retailing. It is difficult to raise additional capital. Long hours are often necessary to make business pay.

Partnership Partnerships are agreements between two or more people Who carry on a business together, usually with a view of making a profit. Partners raise capital and share the responsibility

Partnerships Unlimited partnership (in Italian S.n.c.) - Only some partners contribute to the initial capital: they are called limited partners - There is a general or unlimited partner Limited partnership (in Italian S.a.s.) Unlimited partnership (in Italian S.n.c.) - All partners are liable for the debts

Partnership Advantages Partners may specialize in different areas of business management. Shared decision making. Additional capital injected by each partner. Business losses shared between the partners.

. Identify disadvantages of a partnership

Partnership Disadvantages Unlimited Liability for all partners. Profits are shared. All partners are bound by the decision of any one of them A sole trader, taking on partners will loose independence of decision making.

PUBLIC LIMITED COMPANIES LIMITED COMPANIES: they are formed by two or more shareholders, investors who have shares in the company. Profits are divided among the shareholders in proportion. These payments are called dividends PUBLIC LIMITED COMPANIES PRIVATE LIMITED COMPANIES

What is a Private Limited Company? (Ltd.) It is a company which issues shares. Its shares are not available for sale to the public. Shares cannot be quoted on the Stock Exchange

What is a Public Limited Company? (Plc.) It is a company which issues shares. Its shares are available for sale to the general public. Its share price is quoted on the stock exchange. A board of directors control the management of the company appointed at an annual meeting.

COOPERATIVES All members have a vote No member can dominate All the members help in the running of the company

Franchisor <> franchisee The franchisor receives a little initial payment from the franchisee Franchisees receive the shop furniture, marketing support, training and commercial advice