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Management

Of
Business

Name: Aaliyah Jones


Grade: 12-1
Date: September 24, 2016
Teacher: Ms.Ross

Introduction

This project will be telling you about the different types of business
organizations , their definition , advantages and disadvantages .

Table Of Content
Sole Trader
Partnership

Cooperative
Public & Private Limited Companies
Franchise
Joint Venture
Statuary Board
Non-Profit Organizations
Charity & Voluntary
Non-Government
Privatization & Nationalization

Sole Trader
Sole trader is when one person owns the business.
It does not mean that the owner is the only person who works in the
business. In fact, the owner does not have to work in the business at all. However,

the owner and the business are one and the same in the sense that the business is
not a separate entity from the owner.

Advantages

Easy to establish and manage


Decision making is speedy
Customers receive special attention
Profits are not shared

Disadvantages

Unlimited liabilities
Problem in raising capital
Limited managerial skills
Lack of competitiveness
Lack of continuity

Partnership
A partnership is a business that is jointly operated by the parties involved.
This is one of the ways that the sole trader can expand his /her business.
According to the partnership act of 1980, two to twenty persons can come together
to form a business enterprise.

Advantages

Additional partners will mean more capital


Better decisions may be made since there is more input
Specialization may result in greater efficiency
The expenses and management of the business is shared
Death of partner need not mean the end of the business-greater continuity.

Disadvantages
Generally there is unlimited liability
Possible disagreement between partners
Membership limit of twenty restricts resources of the business
If a partner makes a mistake , all partner are affected
The decision making process is slowed down because of the inclusion of
other partners.

Limited liabilities
Limited liability mean that investors or share holders are not liable for debts
incurred by the company beyond the amounts they invested.

Sleeping partner
The partner who contributes capital to the business, but does not participate in
the overall l management of the operations.

Cooperatives
Cooperatives are businesses formed by groups with similar objectives
and/or interests.
The groups may be producers or users of products or services. Cooperatives
have their roots in agriculture; that is, cooperatives were first established by people
in the agricultural sector. Such persons found it necessary to pool their resources in
the production of farm products. They bought tools, seedlings and other materials
in bulk for farming purposes.

Advantages

Economics of bulk buying through obtaining large trading discounts.


It is democratic form of management. Decision making is shared.
Guaranteed market for members product.
Employment is created within the organization
Members pool their resources

Disadvantages

Conflict may arise when members are both employees and employers
Management may be inexperienced and poorly trained
Lack of capital inhibits expansion.
It does not exist to make or maximize profits and this interferes with its
ability to enjoy worthwhile economic growth

It lacks the speed to take decisions or even make changes to existing policies
in order to facilitate decision making, and thus lose out on many
opportunities to progress.

Retail Cooperative
This is a type of cooperative in which the members come together for the
purpose of buying certain goods or services at reduced costs, as well as ensuring
that the these are in good supply at all times.

Workers Cooperative
A worker cooperative is a business entity that is owned and controlled by the
people who work in it. Worker cooperatives thrive in many industries and
regions.Worker-Owned. Workers own the business together. They usually invest
with a buy-in amount of money when they begin working.

Cooperative Banks
A co-operative bank is a financial entity which belongs to its members, who are at
the same time the owners and the customers of their bank. Co-operative banks are
often created by persons belonging to the same local or professional community or
sharing a common interest. Co-operative banks generally provide their members
with a wide range of banking and financial services (loans, deposits, banking
accounts...).

What Is A Company?

A company is another type of business unit. It is a form of business


organization that is recognized by law as a separate entity from the persons who
actually own it. So a dissatisfied customer could bring a lawsuit against a company
and not directly against the persons who have invested their resources in the
company.

Public Limited Companies

A public limited company is an incorporated body this means that the business is
constituted as a legal entity. In other words the business is separate and apart from
the persons who contributed to its joint stock.

Private Limited
Companies
A private limited company, or LTD, is a type of privately held small business
entity. This type of business entity limits owner liability to their shares, limits the
number of shareholders to 50, and restricts shareholders from publicly trading
shares.

Advantages (Public Limited


Companies)

Better access to capital i.e. raising share capital from existing and new
investors

Liquidity shareholders are able to buy and sell their shares (if they are
quoted on a stock exchange

Value of shares the value of the firm is shown by the market capitalization
(based on the share price)

The opportunity to more easily make acquisitions e.g. by offering shares to


the shareholders of the target firm

To give a company a more prestigious profile

Advantages (Private Limited


Companies)

Limited Liability.

Tax Advantages.

Finance and Resources.

Business Continuity.

Disadvantages (Public Limited


Companies)

Once listed on a stock exchange, the company is likely to have a much larger
number of external shareholders, to whom company directors will be
accountable

Financial markets will govern the value of the company through the trading
of the company's shares, and will represent the market's view of the
company's performance over time

Greater public scrutiny of the company's financial performance and actions

Disadvantages (Private Limited


Companies)

Shares cannot be sold on a public stock exchange.

Limited growth and restricted number of shareholders.

Franchise
A franchise is a business where retail operations pay the owner of a
business to use their name and products.
In a franchise, the owners enter into an agreement with a parent company. The
parent company agrees to the franchised company selling its products or services.
The franchise has to abide by the guidelines and regulations set out by the parent
company. Usually the arrangement is set for a period of time.

Advantages

Franchises offer the independence of small business ownership supported by


the benefits of a big business network.

You don't necessarily need business experience to run a franchise.


Franchisors usually provide the training you need to operate their business
model.

Franchises have a higher rate of success than start-up businesses.

You may find it easier to secure finance for a franchise. It may cost less to
buy a franchise than start your own business of the same type.

Franchises often have an established reputation and image, proven


management and work practices, access to national advertising and ongoing
support.

Disadvantages

Buying a franchise means entering into a formal agreement with your


franchisor.
Franchise agreements dictate how you run the business, so there may be
little room for creativity.
There are usually restrictions on where you operate, the products you sell
and the suppliers you use.
Bad performances by other franchisees may affect your franchise's
reputation.
Buying a franchise means ongoing sharing of profit with the franchisor.

Franchisee
Franchisee is the person or company that is granted a license to do business under
the franchisor's trademark, trade name, and business model, by the franchisor.
The franchisee purchases a franchise from the franchisor.

Franchisor

The franchisor owns the overarching company, trademarks, and products, but
gives the right to the franchisee to run the franchise location, in return for an
agreed-upon fee. Fast-food companies are often franchised.

Joint Venture
A special type of general partnership set up to perform one single business
activity and when the activity is carried out the venture comes to an end.
Historically, joint venture was the term used by Italians to describe pooling of
funds send out a ship on a trading journey. The intention was to sell a
consignment of goods.

Advantages

Entering related businesses that previously presented high barriers to entry.

Gaining access to expertise without the need to hire more staff.

Leveraging existing technologies and patents developed by other companies.

Sharing the risk of high-leverage, but uncertain ventures.

Establishing a presence in new, untapped markets, including international


opportunities.

Disadvantages

Provide companies with the opportunity to gain new capacity and expertise

Allow companies to enter related businesses or new geographic markets or


gain new technological knowledge

access to greater resources, including specialized staff and technology

sharing of risks with a venture partner

Joint ventures can be flexible. For example, a joint venture can have a
limited life span and only cover part of what you do, thus limiting both your
commitment and the business' exposure.

Joint Ownership
A situation in which two or more persons co-own a property.
In other words, if two or more persons jointly own aproperty and one of them dies,
the property does not become part of a decedent's estate; rather, the other owner(s)
continue to own the property. A married couple may jointly own their house, for ex
ample. Likewise, two businesspartners may jointly own a business property. If two
persons own an apartment complex and one of them dies, thewhole of the complex
belongs to the coowner, and not the decedent's heirs. However, the decedent's liabil

ities mayremain attached to this property and may be used to pay off creditors, eve
n if the creditor had nothing to do with the property in question.

Contract Manufacturer
A contract manufacturer ("CM") is a manufacturer that contracts with a firm
for components or products. It is a form of outsourcing.

Statutory Board
A statutory board is one of the three forms of public enterprise in
Singapore which are involved directly or indirectly in economic
development. Tan Chew Huat has defined a statutory board as an
autonomous government agency set up by special legislation to perform
specific functions.

Advantages
They base their decisions on the full costs and benefits involved.
They can be used to influence economic activity. To boost the countrys
output, public corporations can be directly encouraged to increase their
output.
In cases where it is practical to have only one firm in the industry, such
as rail infrastructure, a public corporation would not abuse its market
power.

Disadvantages

Freely transversal
Raise large capital
There is limited liability for the shareholder

Non Government
A non-governmental organization (NGO) is any nonprofit, voluntary citizens' group which is organized on a local,
national or international level. Task-oriented and driven by
people with a common interest, NGOs perform a variety of
service and humanitarian functions, bring citizen concerns to
Governments, advocate and monitor policies and encourage
political participation through provision of information.

Advantages

They have the ability to experiment freely with innovative approaches and,
if necessary, to take risks.

They are flexible in adapting to local situations and responding to local


needs and therefore able to develop integrated projects, as well as sectoral
projects.

They enjoy good rapport with people and can render micro-assistance to
very poor people as they can identify those who are most in need and tailor
assistance to their needs.

Disadvantages

Paternalistic attitudes restrict the degree of participation in


programmer/project design.

Restricted/constrained ways of approach to a problem or area.

Reduced reliability of an idea, due to non-representativeness of the project


or selected area, relatively small project coverage, dependence on outside
financial resources, etc.

Charity and Voluntary


The charity and voluntary organization sector, also called the third sector, notfor-profit sector and community sector, covers a diverse range of roles. Some of
these reflect the kinds of jobs found elsewhere, for example, human resources,
marketing and policy and research, while others are more unique to this sector,
such as charity officer, volunteer management and fundraising.

Advantages
Public recognition and trust
Charities are widely recognized as existing for social good. This can assist with
fundraising.
A lock on assets
Organizations with charitable status cannot use assets for any purpose other than
the pursuit of charitable objectives. The assets of a charity can never be used for
private benefit.
Tax relief
Charities benefit from a variety of tax reliefs

Disadvantages
Restrictions and requirements
.Unpaid board

No equity investment

Privatization & Nationalization


Nationalization refers to the process of a government taking control of a
company or industry, which generally occurs without compensation for the loss of
the net worth of seized assets and potential income.
Privatization, which is the transfer of government-run operations into the
private business sector, occurs more frequently in developed countries.

Advantages
A monopoly owned, run and controlled by the government will stop the
consumers being exploited.
The government can manage the economy by controlling the important
industries.
The government can invest money and make their service more efficient.

Disadvantages
1.Low performance
When the ownership is in public sector, the employs do not work for profit and do
not there performance and efficiency of the employs remains poor.
2. Lack of competition

Competition is necessary for development and increasing the production.


Nationalization has decreased the spirit of competition.
3. Favoritism -The management of nationalize will provide jobs to there favored
persons because the political leaders have influence upon the state authorities

Reference
Definitions Of All Organizations & Types Principles Of Business with SBA
,Study Guide & Exercises By Karlene Robinson And Sybile Hamil.
Advantages & Disadvantages Of All Organizations www.investopedia.com