1. What is a business? Carlos Antonio Ancira Viejo A01190780 Elton Nathan Leal Mireles A01034759 Alejandro Duran Baker A01034803

2. What is it?  An organization whose principal economic purpose is to produce goods and services”

3. Business Functions · Production/operations · Marketing · Finance · Human resources/personnel

4. Production  Involves changing natural resources into a product or the supply of a service”

5. Marketing  Identifies consumer needs in order to satisfy them.”

6. Finance  Is responsible for the control of money in business”

7. Human Resources  Involves the management of people”

8. Classification of business activity 1. Primary production 2. Secondary production 3. Tertiary production

9. Primary production  Includes activity which takes the natural resources from the earth”

10. Secondary production  Involves manufacturing, processing and construction which transform raw materials into goods”

11. Tertiary production  Includes the provision of services”

12. Unit 7: Legal structure – sole traders and partnerships

13. What is a business organisation? A business is often referred to as an organisation that satisfy needs by providing people with goods and services. All organisations will: Try to achieve objectives Try to achieve objectives Use resources Use resources Need to be directed Need to be directed Have to be accountable Have to be accountable Have to meet legal requirements Have to meet legal requirements Have a formal structure Have a formal structure

15. Private sector business organisations  One method of classifying businesses is by sector.  PRIVATE SECTOR: businesses which are set up by individuals or groups of individuals. Businesses will vary according to the legal form they take and their ownership. Unincorporated businesses: no legal difference between the owners and the business. Unincorporated businesses: no legal difference between the owners and the business. Incorporated businesses: a separate legal identity from its owners Incorporated businesses: a separate legal identity from its owners

16. Sole trader  Advantages: Few legal restrictions Few legal restrictions All profit after tax belongs to owner All profit after tax belongs to owner Total control and freedom in decision making Total control and freedom in decision making Schedule flexibility Schedule flexibility Personalized attention from owner Personalized attention from owner Government support programs Government support programs  Disadvantages: Unlimited liability Unlimited liability Limited capital, low capacity to offer guarantees Limited capital, low capacity to offer guarantees Decision making cannot be shaed Decision making cannot be shaed Affected by illness Affected by illness Owner can be personally sued Owner can be personally sued Depends on owner regarding talent and drive Depends on owner regarding talent and drive

17. Partnerships  Advantages: Little formalities for establishing Little formalities for establishing Partners can specialize Partners can specialize More capital can be raised, internally and externally More capital can be raised, internally and externally Share the burden of workload, ideas and decisions Share the burden of workload, ideas and decisions  Disadvantages: Equal and unlimited responsibility for debts Equal and unlimited responsibility for debts Profit is shared Profit is shared Greater difficulty to reach agreements Greater difficulty to reach agreements Partnership could end on death of a partner Partnership could end on death of a partner Decisions of one partner are binding on all partners Decisions of one partner are binding on all partners Partners can be individually sued Partners can be individually sued

18. Limited partnerships A rare form of partnership that has limited liability A rare form of partnership that has limited liability Some partners may provide capital but take no part in the management of the business (sleeping partners) Some partners may provide capital but take no part in the management of the business (sleeping partners) At least one partner must have unlimited liability At least one partner must have unlimited liability

19. Unit 8: Legal structure – limited companies

20. Limited Companies (Sociedad anónima) Separate legal identity and limited liability Separate legal identity and limited liability The capital is divided into shares. The capital is divided into shares. Shareholders can vote and take a share of the profit. Shareholders can vote and take a share of the profit. Run by directors who are appointed by the shareholders. Run by directors who are appointed by the shareholders. The board of directores is leaded by a chairperson. The board of directores is leaded by a chairperson. Annual General Meeting. Annual General Meeting. Pay corporation tax. Pay corporation tax.

21. Forming a limited company They must submit important information to the Registrar of Companies They must submit important information to the Registrar of Companies A Memorandum of Association states details such as name of the company, address, objectives, scope of activities, liabilities of its members, amount of capital. A Memorandum of Association states details such as name of the company, address, objectives, scope of activities, liabilities of its members, amount of capital.

22. Private limited companies  Advantages: Have limited responsibility Have limited responsibility Additional shareholders provide more capital Additional shareholders provide more capital Control is not lost to people external to business: shares are sold only if existing shareholders agree Control is not lost to people external to business: shares are sold only if existing shareholders agree Business continues if a shareholder dies Business continues if a shareholder dies  Disadvantages: Profits are divided into a much greater number of members Profits are divided into a much greater number of members Legal procedures take more time and money Legal procedures take more time and money The public has access to information The public has access to information If a shareholder retires, it takes time to find a buyer approved by rest of shareholders If a shareholder retires, it takes time to find a buyer approved by rest of shareholders

23. Public limited companies Corporations (stock exchange)  Advantages: May raise huge amounts from investors coming from sales of shares to the public May raise huge amounts from investors coming from sales of shares to the public Production costs may be lower as firms may gain economies of scale Production costs may be lower as firms may gain economies of scale Because of size, they may dominate the market Because of size, they may dominate the market Easier to raise finance because financial institutions are more willing to lend to plcs Easier to raise finance because financial institutions are more willing to lend to plcs  Disadvantages: Setting up costs can be very expensive Setting up costs can be very expensive An outside interest can take control of the company An outside interest can take control of the company All accounts can be inspected by the public (including competitors!) All accounts can be inspected by the public (including competitors!) Difficult to deal with customers at a personal level Difficult to deal with customers at a personal level Law and regulations limits their operations Law and regulations limits their operations There may be a divorce of ownership and control There may be a divorce of ownership and control Change is difficult (less flexibility) Change is difficult (less flexibility)

24. Unit 9: Legal structure – not- for-profit organisations

25. Not-for-profit organisations They are run according to business principles but do not aim to make a profit. They are run according to business principles but do not aim to make a profit. Their proceeds or surpluses from trading may be shared with employees and customers or passed to a third party. Their proceeds or surpluses from trading may be shared with employees and customers or passed to a third party. They may employ staff, raise finance, buy resources, sells goods or services, market themselves, have a formal structure and be required to meet the needs of different stakeholders. They may employ staff, raise finance, buy resources, sells goods or services, market themselves, have a formal structure and be required to meet the needs of different stakeholders. They have to operate within the law and may also face competition. They have to operate within the law and may also face competition. They include: They include: Public sector organisations Public sector organisations Co-operatives Co-operatives Mutual organizations Mutual organizations Charities Charities Pressure groups Pressure groups

26. Charities Are organisations with specialised aims. Are organisations with specialised aims. Rely on donations for their revenue but are not required to pay tax. Rely on donations for their revenue but are not required to pay tax. Are generally run according to business principles (minimise costs, promotions, recruit volunteers Are generally run according to business principles (minimise costs, promotions, recruit volunteers

27. Pressure groups Groups of people that attempt to influence decision makers in politics, business and society. Groups of people that attempt to influence decision makers in politics, business and society. There is a wide variety of pressure groups that differ significantly in their aims, objectives and size. There is a wide variety of pressure groups that differ significantly in their aims, objectives and size.

28. Now….  DRAGON’ S DEN AND SHARK TANK”