Business Organizations - Business Revision Notes

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Contents

Business Organisations 5

Sole Trader 5

Advantages 5

Disadvantages 5

Partnership 5

Advantages 5

Disadvantages 5

Private Limited Companies 6

Advantages 6

Disadvantages 6

Setting up a Private Limited Company 6

Articles of Association 7

Memorandum of Association 7

Form A1 7

People Involved in a Company 7

Shareholders 7

Board of Directors 7

Managing Director 8

Chairperson 8

Company Secretary 8

Auditor 8

Co-operatives 8

Advantages 8

Disadvantages 9

State Owned Enterprises 9

Advantages 9

Disadvantages 9

Privatisation 10

Advantages 10

Disadvantages 10

Franchises 10

Advantages 10

Disadvantages 10

Alliances 11

Advantages 11

Disadvantages 11

Transnational Companies 11

Advantages 11

Disadvantages 11

Indigenous Firms 12

Advantages 12

Disadvantages 12

Changing Trends in Structure and Ownership in Ireland 12

Why do Businesses Need to Change their Organisational Structure? 13

Business Organisations

Sole Trader

  • This is a company set up, run and owned by one person. Example: hairdresser.

Advantages

  • Easy to set up, no government permission needed. However must register name with the Registrar of Business Names.
  • Gets to keep all the profits.
  • Confidential- accounts do not have to be published.
  • Full control, makes all the decisions.

Disadvantages

  • Unlimited liability- they are personally liable if the business goes bankrupt. Their personal possessions such as house, car are at risk if the business fails.
  • It can be difficult to get loans as a result of this.
  • Can be stressful and pressurising with little holidays.

Partnership

  • 2- 20 partners combine their resources and talents. Example: KPMG.
  • The Deed of Partnership is a contract that sets out the issues that could arise in the partnership and how to resolve them such as how will profits be shared.

Advantages

  • There are few legal requirements when setting up a partnership.
  • More capital is available due to more partners.
  • Better decision making as partners can combine their areas of expertise when making dec...

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