Investigation of the Types of Business Ownership

Investigation of the 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.

After sole traders partnerships are the most common type of business.

Although there are no legal formalities when a partnership is formed

most partnerships will have a partnership agreement. A partnership

agreement is a legal document which will state each partners rights in

the event of a dispute, they cover issues such how the profits and

losses will be shared amongst the partners, the rules for taking on

new partners, the procedure for ending the partnership and all legal

formalities.

Public Limited Companies (PLC). This type of limited company tends to

be larger than private limited companies. In order to become a public

li...

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...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.