This website uses cookies to ensure you have the best experience. Learn more

Legal Structure Of A Business Orgnanisation

1984 words - 8 pages

Legal Structure of a Business Orgnanisation

Business organisations are the different legal forms a business can
adopt. The key distinction is that some businesses provide limited
liability for any debts the business incurs. Others have unlimited
liability - which obviously doesn't

[IMAGE]Unincorporated Incorporated

Up Arrow Callout: Sole-trader

Up Arrow Callout: Partnership

Up Arrow Callout: Private Limited Company (ltd)

Up Arrow Callout: Public Limited Company (plc)

What is a Sole-trader? (Builder/local shops/hairdresser)

Sole-traders are individuals who own and operate their own businesses.
Although there may well be other employees (usually no more than 5)
the final decisions are made by the 'sole-trader'. A sole-trader is
the only one that benefits financially from the success, but must also
face the burden of any failures.

Therefore, in the eyes of the law the business and the individuals are
the same. This means that the sole-trader has unlimited liability.

What are the advantages and disadvantages of being a Sole-trader?

Advantages Disadvantages

(1) Keeps all the profits (1) Limited Capital (finance)

(2) Set your own agenda (2) Long & hard hours

(3) Secretive business (except Taxman!) (3) Unlimited liability

What does Unlimited Liability mean?

Unlimited liability means that owners are liable for any debts
incurred by the business, even if it requires them to sell all there
assets and possessions and become personally bankrupt.

What is a Partnership? (Doctor's Practice)

To overcome many of the problems of a sole trader, a partnership may
be formed. A partnership is an association of individuals and
generally there will be between 2 and 20 partners.

Each partner is responsible for the debts of the partnership and
therefore you would need to choose your partners carefully and draw up
an agreement on the responsibilities and rights of each partner (known
as a Deed of Partnership or The Articles of Partnership).

The most common examples of a partnership are doctor's surgeries,
veterinarians, accountants, solicitors and dentists.

As stated earlier, most partners in a partnership face unlimited
liability for their debts. The only exception is in a Limited
Partnership. This is where a partnership may wish to raise additional
finance, but does not wish to take on any new active partners.

To overcome this problem, the partnership may take on as many Sleeping
(or Silent) Partners as they wish - these people will provide finance
for the business to use, but will not have any input into how the
business is run. In other words, they have purely put the money into
the business as an investment. These Sleeping Partners face limited
liability for the debts of the partnership. A partnership, just like a
sole trader, is an...

Find Another Essay On Legal Structure of a Business Orgnanisation

Legal Environment of Business Essay

2390 words - 10 pages Introduction XYZ Construction Inc. is concerned about the economic and legal factors that could affect the organization, particularly as the company transitions during these upcoming months from a private company to public ownership, or, initial public offering (IPO). XYZ must be concerned with the legal environment of our business, which is the basic set of rules, and laws that surround the atmosphere of business in general, and the industry

The Structure of Lipid A Essay

633 words - 3 pages structure compared with the rest of the molecule (Petsch and Anspach., 2000). Bacteria lacking lipid A are not known (Perola et al., 2007). LPS containing a lipid A and Kdo, a unique sugar along with a substituent with negative charge is the smallest known structure necessary for the growth and survival of Gram-negative bacteria (Helander et al., 1988). Most usually the structure of this hydrophobic portion of LPS molecule is fairly well

Capital Structure of a Firm

875 words - 4 pages Introduction Capital structure is a term used to refer to the fraction of debt and equity that make up a firm’s total capital. The cost of debt is the amount above the borrowed amount that lenders demand from the firm in form of interest. There are benefits associated with each financing criteria. For instance, using debt to finance a project qualifies a firm for an interest tax shield. This means that, interest paid for debt is deducted

The Legal and Ethical Environment of Business

601 words - 2 pages such as the U.S. Patriot Act, designed to protect citizens from terrorist activity. If threats of bombing and violence are acted upon, DWI will not have a business to run therefore; safety is our first course of action regardless of the threats of boycotting. Additionally, DWI must not cease to service individuals of Middle Eastern decent as this presents a legal issue of segregation contrary to the Civil Right Act of 1964.The matter recently

Responsibility in The Legal Environment of Business

919 words - 4 pages stated in our book The Legal Environment of Business, “if a manufacture fails to exercise “due care” to make a product safe, a person who is injured by the product may sue the manufacture for negligence”. Kolchek could sue the manufacture. In this case which is Great Lakes spa. Porter was just a company that was selling the product. Great Lakes spa should have taken the initiative to examine their products throughly before putting it out on the

Legal Environment for a Start Up Equestrian Business

1426 words - 6 pages Starting up a new business in this day in age can be a daunting task. One of the many concerns an entrepreneur faces, is the legal environment in which the new business will operate. In my case we have a fledgling equestrian facility dealing primarily in boarding, but to a lesser extent facilitating a wide range of other equestrian activities. It does not take much imagination to see that riding a one-thousand pound animal in an environment of

Know how political, legal and social factors impact a business

1472 words - 6 pages it, whether it be through financial help from the IMF or whether it be more direct political help from the EU. These organisation do not have a direct effect on either cross street or glow warm. However if the EU decide to enforce sanctions on another country that either of these business deal with, tis could affect the way that they can operate and could lead to lose in business. Legal: There are many different laws and regulations that

Social Structure of a Law Office

1538 words - 6 pages Social Structure of a Law Office Social structure is a part of every organization, whether formal or informal. A very defined social structure is often evident in the workplace. In my workplace, a Law Firm, the social structure is very concrete. There are many perspectives from which the social structure can be viewed. It can best be discussed in terms of statuses, roles, interactions, formal and informal organization, how members are

Management Decision Regarding the Legal Form of Business

798 words - 3 pages Abstract After inventing a safer, more user friendly and superior quality household device a firm will be formed to manufacture and distribute my invention. Consideration will be given to the main three legal forms of business in order to make a management decision on which would best suit the needs and limitations of the product and inventor. Limited funds and knowhow are just a sample of the challenges facing the new firm. After

Expanded Legal Section of Neat Accommodations Business Plan

1829 words - 8 pages text will explore the operational implications of the act for Neat by making reference to Service Alberta’s Consumer Tips – Information for Landlords document and can be seen as an approximate, expanded equivalent to the legal section of Neat’s forthcoming business plan . Important Note: The document referenced includes the following disclaimer: “this publication is intended to provide general information only and is not a substitute for legal

The Cost of a Legal Education

1843 words - 8 pages are currently attending law schools have high student loans to pay back once they graduate. The problem that is gradually increasing is the fact that jobs in the legal arena are hard to find. As a result, law students are barely making ends meet when they graduate. They vast majority of law graduates have little to no money to spend after they have paid their student loan bills. If the cost of obtaining a legal education continues to increase

Similar Essays

Business Structure Of Google Essay

686 words - 3 pages , 2003). Because Google Inc. now maintains dominance of the search market and continues to expand a host of other services Google can attest to taking risks and maintains that strong organizational culture will move mountains.To this aim, what has attracted me to Google's environment is the strong organizational culture that encompasses all employees. The founders, Larry and Sergey, have been innovators of both technology and business, which is not

Organisational Structure, Culture, And Management Style Of A Business

1065 words - 4 pages Organisational Structure, Culture, and Management Style of a Business C2 An Analysis of How the Organisational Structure, Culture And Management Style of the Business Affects its Performance and Operation and Help It to Meet Its Objectives The organisation structure of Wednesbury IKEA The organisation structure in the ‘Appendix section’ belongs to the Wednesbury branch of IKEA. Wednesbury IKEA is a large formal organisation and

What Is The Structure Of A Business Organisation?

2909 words - 12 pages not all, the above elements in the business. If these don´t exist then there´ll be no systematical way of dealing with everyday issues. There will be no structure, so no-one will know who has authority and responsibility. Without a plan the company loose direction, whereas with a plan the company will have small amounts of co-ordination and co-operation so people know whose doing what and when. Finally, goals are one of the most

Legal Forms Of Business Essay

950 words - 4 pages An average person has an innovative plan to start a business. It begins with an idea but what should they do afterwards. If someone wants to start a business they must ask themselves several questions. What is the size of the business? What level of control do they want to have? What are the business risk and vulnerabilities? What are the initial startup expenses? All of these questions will help them decide which legal form of business they