Understanding different business forms
- Created by: lewis_surtees7
- Created on: 04-02-19 12:25
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- Understanding different business forms
- Private Sector Organisations
- Unincorporated
- Sole trader
- Single owner
- Unlimited employees
- Unlimited liability
- Partnership
- 2-20 partners
- Can be ordinary, limited or LLPs
- Sole trader
- Incorporated
- Private Limted Company (Ltd)
- Limited liability
- Shares sold privately
- Shares
- Public Limited Company
- Limited liability
- Share capital >£50,000
- Shares sold publicly
- Ordinary share capital
- The price paid for a 1% share in a business - a permanent investment
- Market Capitalisation
- The value of outstanding shares in a PLC
- Public Limited Company
- Public Limited Company
- Limited liability
- Share capital >£50,000
- Shares sold publicly
- Private Limted Company (Ltd)
- Unincorporated
- Role of shareholders and why they invest
- Shareholder = a person who owns at least one share in a company
- To provide financial support for a business
- To be involved in the running of a business
- To gain control of a business - buying 51%
- To receive a regular dividend
- To make a capital gain
- Influences on share price and the significance of share price changes
- State of the economy
- Performance of the company
- Competition in the market
- Proposed takeovers
- Investor's expectations and their response to rumours
- Factors affecting the choice of business form and changing business form
- The need for finance in order to expand
- The size of the businesses and level and type of investment needed
- The need for limited liability
- The degree of control desired by owners
- The nature of the business and its objectives
- The level of risk involved
- Non-Profit organisations
- No defined structure, can take many different business forms
- NGOs
- Have a governing body to manage affairs
- Value driven and have social, environmental, community, welfare or cultural aims
- Established for purpoases other than financial gain - profits re-invested
- Use volunteers often
- Operate under various legal structures
- Effects of ownership on mission, objectives, decisions and performance
- Public Sector - focused on providing essential services
- Not-for profit - focused on generating enough surplus to meet requirements
- A sole trader that becomes a partnership has to take into account view of partner
- Private Sector Organisations
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