Legal Structures

Tell me three things... about the topic we are studying. Or, you learnt in the last lesson. STARTE R

Questions you would like to ask Today we will begin studying ____________. What are the questions you would like answered.

Noun Play _________ is like (a) ________ because…. First blank is for the topic, concept etc. Second blank is for the random noun. e.g. Communication is like driving because…

Private Sector Unincorporated Incorporated Sole TraderPrivate Ltd Company Partnership Public Limited Company

Sole Trader Easy, quick and cheap to set up Absolute control Flexible But Only one source of finance Unlimited liability Limited lifespan High degree of risk and responsibility

Partnerships Quick and cheap to set up Multiple sources of finance Shared responsibility Additional skills available But May result in compromise and conflict Unlimited liability Profits shared Limited lifespan

Forming a Limited Company The process of Incorporation: Registration with the Registrar of Companies  Memorandum of Association – name, purpose, size, etc.  Article of Association – internal management structure, rights of shareholders, etc. The business becomes a separate legal entity with its own legal ‘personality’ Risk is limited to the amount of money invested

Private Limited Company Multiple sources of finance Limited liability Formal decision-making structure But Potential loss of control Set-up costs Auditing and AGM required Corporation tax to pay

Conversion to a plc Private Limited companies with share capital of more than £50,000 can convert Companies are ‘floated’ on the stock market Any member of the public can buy shares This opens up new sources of finance for further expansion Floatation can be an expensive process

Public Limited Companies Unlimited sources of finance But High set-up costs Auditing & publication of accounts required Corporation tax to pay Loss of control (takeover threat) Likely to become highly focussed on short-term profit Divorce of ownership and control

Factors Affecting Choice of Structure Ownership & Control Liability Image Objectives Cost  Setup  Administration  Taxation

Other Legal Structures?

Alternative Structures Cooperative Public Ownership Not-for-profit organisations:  Mutuals  Charities  Trusts

Questions you would like to ask e.g. Today we have been studying_______________. Think of 1 questions to ask other people in the class about today’s lesson. PLENA RY

Freeze Frame Students have to produce a freeze-frame showing one aspect of their learning. E.G. A communication method or a finance or a sector of the economy

Spell a key word to your friend using sign language…

Exam Question Write an exam question based on your learning today. Then, swap books and answer someone else’s question. Answer PLAN: Intro – define key word Explain 1 advantage (BLT) Explain 1 disadvantage (BLT) Conclude – I think, however, it depends… E.g. Discuss whether a bank loan is suitable for business startup. Start with; Discuss or Evaluate whether or To what extent is _________________________________________________ _________________________________________________ _____________________________________ (6m) 3+ connectives 3+ key words