Business Organisation The different forms of business organisation

Public/Private and Voluntary Sector • Public – government owned – public shares. • Private – non government owned – non public shares, small number of shareholders. • Voluntary - not for profit

Public Sector – provision of service • Funding comes from; – Local authority – National government – Entrance fees and hiring charges – Some small scale sponsorship – Grants – National Lottery Funding

Private Sector – aim to make a profit • Funding comes from; – Investment from individual – Sales of shares – Sponsorship – Membership subscriptions – Loans

Voluntary Sector • Funding comes from; – Annual subscriptions – Match day fees – Fund raising – Local sponsorship – Grants from NGBs – National Lottery

Business Entity – Sole trader – Partnerships – Franchises – Public Limited Companies – Private Limited Companies • What’s the difference? Have you heard of any before?

Options for Ownership Sole trader – simplest way to begin a business, any losses you incur are your responsibility so your personal assets are at risk e. g. your house. No legal separation from the individual and the business. • All profits however are yours • Little paperwork • Must keep accurate financial records and register with the Inland Revenue

Options for Ownership Partnerships – two or more people set up a business togetherefore sharing the all financial and management duties. Usually an agreement is set up between the pair that clearly states their individual role. • Lower tax and National Insurance to pay • Each partner brings new skills • Share personal liability for business debts.

Options for Ownership Limited Companies – separate legal identity from its owner e. g. ‘limited’ liability. Owners are not personally liable for any debts the business has. • If the business fails shareholders simply lose their investment. • To set up a Ltd company you would need certain documentation e. g. memorandum of association that explain who will have what role in the company. • Pay corporation tax on profit and must have accounts audited.

Private Limited Company • Small – medium sized company – can be a family run company. • Must have Ltd after name • Must have at least £ 50, 000 share capital • Must not allow listing of shares on the stock market

Public Limited Company (PLC) • Limited liability • Business with over £ 50, 000 of share capital • Allowed to quote shares on the stock exchange.

Options for Ownership • Franchise A business that uses the existing logo, name and trading methods of an existing successful business. – Franchisee pays for the local rights to the name, logos etc. – Franchisor supplies all materials and decides on the layout and design of the business. – Franchisor takes annual payment from franchisee based on percentage of turnover.

Advantages of a Franchise • Franchising has a much higher success rate than independent firms. • The trading strategy and methods have been tried and tested elsewhere so more likely to be successful. • Name and logo well known so there is instant recognition. • Part of the annual payment to the franchisor goes towards larger advertisement campaigns.