Organisations Flashcards
What is a Private limited company (ltd)?
A business that sells shares privately to invited members.
What is a Public limited company?
A company where shares are offered to the public.
What is a Multinational organisation?
A company which has its headquarters in one country but has assembly or production facilities in other countries.
What is a Franchise?
Buying into an existing business and acquiring the right to use an existing business idea in a particular location.
Advantages of Private Limited Companies (LTD)…
Limited liability
More able to raise money
Owner can retain control
Disadvantages of Private Limited Companies (LTD)…
Must be registered with the Registrar of Companies
High set-up costs (legal and administrative)
Harder to motivate and control workers
Advantages of Public Limited Companies (PLC)…
Raise more money by selling shares on the stock exchange
Easier to growth and diversify
Disadvantages of Public Limited Companies (PLC)…
Disagreements over how to run the company
Threat of take over
Difficult to pursue objectives other than increasing profit
Advantages of Sole Traders…
Easy to set up
Sole trader retains all profits for themselves
Sole trader makes all the decisions
Disadvantages of Sole Traders…
Can be difficult to raise finance
Unlimited liability
Heavy workload
Advantages of Partnerships…
More equity available to finance the business compared to a sole trader
Different partners can bring different skills
Workload is shared
Disadvantages of Partnerships…
Unlimited liability
Profit is shared between the partners
Partners may not always agree on decisions for the business
Define Public Sector
The public sector means the organisations run by government that exist to provide a service for the population and communities.
Three things which should be included on a deed of partnership:
Shared Profits
Workshare
How much capitol each partner contributes
What is the problem with unlimited liability?
If the business goes into debt, so do they
