Kaizen advantages and disadvantages tutor2u

Private sector companies

The part of an economy in which goods and services are produces and distributed by individuals and organisations that are not part of the government or state bureaucracy.

A variety of legal structures exist for private sector business organisations depending on where they are located. Individuals can conduct business without necessarily being part of any organisation. The main types of businesses in the private sector are;

Sole trader

the business is owned by just one person. There are no legal formalities needed but once set up they must pay tax and national insurance contributions.

A partnership is when more than one owner shares the responsibility of the business. There are no legal formalities though a deal of partnership may be drawn up which is a contract about the roles and procedure to be divided between the partners. All the active partners all have unlimited liability

Private limited company

Private limited company - They must set out the company’s sector and constitutional procedure in the memorandum of association and the articles of association. They are registered for VAT if turnover exceeds £150,000. Maximum number of members in a private company is restricted to 50 members. It has limited liability with private shares. Private companies may issue stock and have shareholders. However their shares do not trade on public exchanges and are not issued through an initial public offering. In general the shares of these businesses are less fluid

Public limited company

A Public limited company is where shares are open to the public. It is one whose membership is open to general public. The minimum number required to form such a company is seven but there is no upper limit. Such companies can advertise to offer its shares to the general public through a prospectus. These public limited companies are subjected to greater supervision of control. It has limited liability. A public limited company’s stock can be acquired by anyone and holders are only limited to potentially lose the amount paid for the shares. Because of large numbers of investors the risk of loss is divided

A franchise is where a business owner pays a corporation to use their name and receives advice and marketing for the business

A cooperative is where all workers have equal pay and make joint business decisions

Cooperatives

It is owned by and operated for the benefit of those using its services. Cooperatives have been successful in a number of fields including the processing and marketing of farm products, the purchasing of other kinds of equipment and raw materials, in wholesaling, retailing, credit and banking

Voluntary organisation

A voluntary association or union also sometimes called a voluntary organisation or unincorporated association is a group of individuals who voluntarily enter into an agreement to form a body or organisation to accomplish a purpose

Charitable organisation

A charitable organisation is a type of non profit organisation. It may be in areas serving the public interest

RR-F4/Business and the Business Environment/Module Booklet/BIS - A Guide to Legal Forms for Business.pdf
A GUIDE TO LEGAL FORMS FOR BUSINESS

NOVEMBER 2011

Guide to Legal Forms Unincorporated legal forms: The distinguishing feature of unincorporated forms is that they have no separate legal personality. There are three main forms:

Sole Trader This is the simplest way to set up and run a business: ownership and control of the business rests with a single individual. Being a Sole Trader is inherently risky because the individual is not separate from the business and has sole unlimited personal liability for the business, its debts and contractual obligations, and any claims against it. They own all the assets of the business and can dispose of them as they wish, and may employ staff and trade under a business name. However it is unlikely that sole trader status will be suitable for businesses which need more than a small level of external investment – being unincorporated limits borrowing and prevents the business raising equity finance by issuing shares.

Regulation for the Sole Trader is minimal: there is no requirement for a formal constitution for the business, and no need to register or file accounts and returns with Companies House. Sole Traders are treated as self-employed by HMRC and must register and make an annual self assessment tax return – profits from the business are treated as personal income subject to income tax and national insurance contributions.