The Types of Business Ownership
This report is about the advantages and disadvantages
of different types of
business ownerships.
Introduction
I am going to write about the advantages and disadvantages of
different business ownerships including:
* Sole Trader
* Partnership
* Franchise
I will include the definitions of some of the business ownerships.
Main Body
SOLE TRADER
Sole trader, as the name suggests, is where an individual is the sole
owner of a business. The business is often quite small in terms of
size (as measured, for example, by sales generated, or number of staff
employed) however the number of these businesses is very large indeed.
Examples of these businesses can be found in most industrial sectors
but particularly in most service sectors. Hence services such as
electrical repair, picture framing, photography, diving instruction,
retail shops, and hotels have a large proportion of sole trade
business
Advantages
* A sole trade business is easy to set up. No formal procedures are
required and operations can often commence immediately (unless special
permission is required because of the nature of the trade or service,
such as running licensed premises).
* The owner of a sole trader business can decide the way in which the
business is to be conducted and has the flexibility to restructure or
dissolve the business whenever it suits. The law does not recognise
the sole trader as being separate from the owner and so the business
will cease on the death of the owner.
* Other advantages include having complete control over the business
and its profits; you are...
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* Franchisors often provide initial training and advice
DISADVANTAGES
* A franchisee is not really his or her own boss they are under
control of the franchisor
* If some franchises run their branch badly then they may all suffer
as a result.
Evaluation
In conclusion I think the best business that I have analysed I think
the partnership business is the best for financial gain. I think the
sole trader ownership is the best for being your own boss and is the
easiest to set up.
The franchise is the best for having a good image and has the added
security that the business is going to be a success unlike starting a
new idea which can be risky and may fail .The overall best business
that I have studied in my opinion is the franchise less advertising is
needed and is the safest to set up.
ii) If one is the owner or operator, liability may attach even if some other
According to Corporation Act 2001 s124(1), it illustrates that ‘’A company has the legal capacity and powers of an individual both in and outside the jurisdiction” . As it were, company as a legal individual must be freely with all its capital contribution shall embrace liability for its legal actions and obligations of the company’s shareholders is limited to its investment to the company. This ‘separate legal entity’ principle was established in the case of Salomon v Salomon & Co Ltd [1987] as company was held to have conducted the business as a legal person and separate from its members. It demonstrated that the debt of company is belonged to the company but not to the shareholders. Shareholders have only right to participate in managing but not in sharing the company property. Besides ,the Macaura v Northern Assurance Co Ltd [1925] demonstrates that the distinction between the shareholders and company assets. It means that even Mr Macaura owned almost all the shares in the company, he had no insurable interest in the company’s asset. The other recent case is the Lee v Lee’s Air Farming Ltd [1961] which illustrates that the distinct legal entities between employee ad director allows Mr.Lee function in dual capacities. It resulted that the corporation can contract with the controlling member of the corporation.
...responsibility of generating profit and maximizing it, but then it should take into account the principle elements that are very crucial to its survival - stakeholders. For instance, if customers stopped buying product or investor withdrew their investment because of a greedy pursuit of profit. The future of an entire business collapses. In addition to this, maximizing the profit by just binding to the rules of the game is not enough since the rules of the game are not always fair, thus primary and secondary stakeholders should be considered while making money.
Exploring the Types of Business Organisations There are two Business Sectors: Public Sector These are businesses owned and run by the government. Some examples of Services provided in the public sector are the postal service, schools, colleges, housing environment, some bus and train services, fire, police, ambulance and local justice and social services. Their method of raising capital is different as Private Sector businesses have to raise their own capital e.g. their own money, a bank loan etc. The Public Sector business can get the money required from the Treasury or from local rates.
This paper will have a detailed discussion on the shareholder theory of Milton Friedman and the stakeholder theory of Edward Freeman. Friedman argued that “neo-classical economic theory suggests that the purpose of the organisations is to make profits in their accountability to themselves and their shareholders and that only by doing so can business contribute to wealth for itself and society at large”. On the other hand, the theory of stakeholder suggests that the managers of an organisation do not only have the duty towards the firm’s shareholders; rather towards the individuals and constituencies who contribute to the company’s wealth, capacity and activities. These individuals or constituencies can be the shareholders, employees, customers, local community and the suppliers (Freeman 1984 pp. 409–421).
Who is the decision maker in this case, and what is their position and responsibilities?
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This separation between ownership and managerial control in this instance can be problematic as the principal and the agents have different interests and goals. In a large publicly traded corporation such as NOL/APL, shareholders (principals) lack direct control when the CEOs (agents) make decisions t...
A Sole Trader is a business that is owned by only 1 person. They are
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