types of organisations

• main types of business ownership

  sole trader

  partnerships

  limited companies (private and public)

  public corporations
• characteristics relating to size

  • concepts of risk,ownership and limited liability
  • public corporations - reasons for and against public ownership
  • ownership, control, sources of finance, use of profits, stakeholders and shareholders
  • appropriateness of different forms of ownership
• different forms of business organisation

  • franchises
  • social enterprises
  • multinationals
• what is a franchise

  a structure in which a business (franchisor) allows another operator (the franchisee) to trade under their name
• what is a franchisor

  a person or business who offers to franchise to other businesses its trading methods, products
• what is a franchisee

  person or business buying the franchise
• what is a royalty


  a payment made to the franchisor based on the sales turnover of the franchise
• pros and cons for the franchisor

  the franchisor is the person or business who owns the trade name which is also known as the franchise.

  they offer the franchise to the franchisee in return for a fee and a share of the profit.

  the franchise will receive support from the franchisor. they will also get all the equipment and ingredients they need to run the business.
• social enterprises

  a business that aims to improve human or environment well being rather than make a profit for owners
• public corporations/enterprises

  businesses owned and run by the government
• examples of public corporations

  dubai electricity and water authority

  united states postal services
• sole trader

  sole trader businesses are owned and ccontrolled by one person.

  the owner may decide to employ other people to help run the business but the main decisions are made by the owner.
• can they keep profit and have control on the workers employed

  they get to keep any profit the business makes and can choose how many workers they employ. it can be very rewarding but also risky
• sole traders - liability

  sole traders risk their own liability and if a sole trader business gets into assets, the owner may have to sell their own house or belongings to pay what is owed. this is called unlimited debt.
• sole traders - having to do everything by yourself

  sole traders may also have to work long hours and need to be skilled at many roles in order to run the business effectively. if the owner is ill it may be difficult for the business to continue
• partnership

  another form of business

  not as common as a sole trader, still a common business structure

  very similar with sole traders
• key features of a partnership are

  between 2 and 20 people

  shared profit and losses

  shared decisions

  unlimited liability
• advantages of a partnership

  easy to set up

  shared responsibility for debts

  shared decision making and responsibility

  each partner invest capital

  wider range of skills and expertise
• disadvantages of a partnership

  unlimited liability

  disagreements

  profits shared

  some partners may not work as hard as others
• deed of partnership

  a formally written agreement which details how a partnerships needs to be structured or run
• what does the deed of partnership include

  how much each partner has invested

  how profits and losses are to be divided

  how all decisions are to be made

  how someone can join or leave the partnership
• limited liability

  each shareholders liability for the company debts is limited to the amount of money that they have invested. they cannot have personal belongings taken from them in order to pay the business debts
• shareholder

  a shareholder is someone who invests money into a limited company. each share that they buy represents a proportion of the business
• private limited liability - key features

  owned by shareholders

  has LTD or limited after it's name

  sells shares privately - people you know

  separate legal identity

  limited liability
• public limited companies (PLC's) examples

  netflix

  apple

  unilever
• features of public limited companies (PLC's)

  has PLC after their name

  limited liability

  separate legal entity

  owned by shareholders

  normally large companies

  shares for sale on the stock exchange
• what is a public limited company

  a public limited company is a company that offers its shares to the public. listed on the stock exchange so their shares are bought and sold