THE PRIVATE SECTOR
Owned by individuals or groups of individuals,
or the government has a shareholding
liability = responsibility to settle a debt
a) limited liability
responsibility for debts to the value of
the investment
b) unlimited liability
the risk to sell personal assets/property
to pay for business debts
Assets
items of value:
- cash
- land
- buildings
- machines
- jewellery
- shares
TYPES OF BUSINESS
ORGANISATIONS
1. Sole proprietorship / sole trade
2. Partnership
3. Limited companies/corporations
a) Private limited company (Ltd.)
b) Public limited company (Plc.)
1. Sole proprietorship / Sole trade
unincorporated =
privately owned business with no legal
difference between the owners and the
business
2. Partnership
a) unlimited partnership (general)
b) limited partnership
DOCUMENT FOR PARTNERSHIP
Deed of partnership
(Partnership agreement
Articles of partnership)
Limited companies
1. The ownership of a limited company is divided up into equal
parts called shares.
2. Whoever owns one or more of these is called a shareholder.
3. Have their own legal identity, their owners are not personally
liable for the firm's debts (limited liability)
4. Owners are not necessarily involved in running the business,
unless they have been elected to the Board of Directors
3. Private limited company
(Ltd.)
incorporated = have their own legal identity and can
sue or own assets in their own right
 often a small business such as an independent retailer
 shares do not trade on the stock exchange.
3. Public limited company
(Plc./Inc.)
incorporated = have their own legal identity and can
sue or own assets in their own right
 usually a large, well-known business. This could be a
manufacturer or a chain of retailers with branches in
most city centers
 shares trade on the stock exchange.
Setting up:
1. details of the business
(technical, financial, administrative)
2. lawyers draw up two documents for
the Registrar of Companies
Documents for limited companies
1. The Memorandum of Association (Charter):
name, type of business, premises, total
share capital –
for the outside world
2. The Articles of Association (Bylaws)
powers and duties, issue of shares, AGM,
salary and appointment of MD for the internal purpose
Certificate of incorporation
Which companies are the following advantages for:
1. You can increase your capital by selling
shares on the stock exchange.
________________________________
2.
This is a good way of sharing the pressure
and work involved in starting a business.
__________________________________
3.
You have total control of your business.
__________________________________
4.
The financial risks that you take are
restricted.
__________________________________
COMPLETE THE BOXES WITH THE WORDS AND
EXPRESSION FROM THE LIST BELOW:
free market, raw materials, joint stock company, sole trade, retail
trade, partnership, telecommunications, municipal enterprise
type of business:
___________________
___________________
___________________
___________________
economy:
___________________
___________________
___________________
___________________
COMPLETE THE PASSAGE BELOW:
The simplest form of business is a _________________. The
___________receives all the profits and is responsible for any
_________. He/she has unlimited ___________________which
means that he/she can lose all the __________________ if the
company goes ____________. It is difficult to ____________
money for expansion and ________________ with large firms.
TRANSLATE
komanditor __________________________
Izjava o osnivanju _____________________
Nadzorni odbor _______________________
Zakon o trgovačkim društvima
______________________________________
Upravni odbor _________________________
Statut _______________________________
dioničko društvo d.d.____________________
društvo kapitala ________________________
1. RB: pp: 50 - IX
51 – I-IV
2.
https://www.youtube.com/watch?v=pPVkG9kr
OMI&feature=related
1. What is the difference between limited and general partnerships?
2. What kind of business is a corporation? Compare it to limited
companies in the UK.
3. If you had enough money to invest by the end of the year,
which type of business would you back? Why?
3. Revision:
https://www.youtube.com/watch?v=mYt94mAGPxU