Organisation

Types of Organisation.
Introduction
A business is always owned by someone. This can just
be one person, or thousands. So a business can have a
number of different types of owner ship depending on
the aims and objectives of the owners.
Most businesses aim to make profit for their owners.
Profits may not be the major objective, but in order to
survive a business will need make a profit in the long
term.
Some organisations however will be not-for-profit,
such as charities or government-run corporations.
Main types of business organisation
Sole trader
Partnership
Private Limited Company (Ltd)
Public Limited Company (plc)
Co-operatives
Franchises
Public sector
Measuring size of a business
No one measure of the size of the business
Options
Number of employees
Number of outlets (e.g. shops)
Total revenues (or salesper year)
Profit
Capital employed amount invested in business
Market value Often need to consider several measures
together
Business size is relative e.g. how large is a
business compared with its main competitors?
Sole Traders
A sole trader is a business that is owned by one person.it may
have one or more employees
The most common form of ownership in the UK
Often succeed why?
Can offer specialist services to customers
Can be sensitive to the needs of customers since they are closer to
the customer and react more quickly
Can cater for the needs of local people a small business in a local
area can build up a following in the community due to trust
Key legal points
Keep proper business accounts and records for the Inland Revenue
(who collect the tax on profits) and if necessary VAT accounts
Comply with legal requirements that concern protection of the
customer (e.g. Sale of Goods Act)
Operating as a sole trader
ADVANTAGES
Total control of business by owner
Cheap to start up
Keep all profit
DISADVANTAGES
Unlimited liability
Difficult to raise finance
May be difficult to specialise or enjoy economies of scale
Problem with continuity if sole trader retires or dies
Unlimited liability
An important concept it adds to the risks
faced by the sole trader
Business owner responsible for all debts of
business
May have to sell own possessions to pay
creditors
Sole trader forming a partnership
Spreads risk across more people
Partner may bring money and resources to
business
E.g. better premises to work from Partner may
bring other skills and ideas to business
Increased credibility with potential customers
and suppliers who may see dealing with
business as less risky
Partnership
Business where there are two or more owners of the
enterprise.
Most partnerships have between two and twenty members
though there are examples like the major accountancy firms
where there are hundreds of partners.
A partner is normally set up using a Deed of Partnership.
This contains:
Amount of capital each partner should provide
How profits or losses should be divided
How many votes each partner has (usually based on
proportion of capital provided)
Rules on how take on new partners
How the partnership is brought to an end, or how a
partner leaves
The Indian Partnership Act defines partnership as
Partnership is the relation between persons
who have agreed to share the profits of a
business carried on by all or any one of them
acting for all.
The persons who have agreed to join in
partnership are individually called Partners and
collectively a firm.
A partnership firm can be formed with a
minimum oftwo partners and it can have a
maximum of twenty partners
Types of Partnership
According to the nature of agreement among partners,
there
can be three types of partnership as follows:
(i) Partnership at-will: Such a partnership exists on the will of the
partners. That is, it can be brought to an end whenever any
partner gives notice of his intention to do so.
(ii) Particular partnership: A particular partnership is formed for
undertaking a particular venture. It comes to an end
automatically with completion of the venture.
(iii) Partnership for a fixed duration: Such partnership is
for a fixed period of time say 2 years, 5 years or any other
duration.
ADVANTAGES OF PARTNERSHIP
Spreads the risk across more people, so if the business
gets into difficulty then the are more people to share
the burden of debt
Partner may bring money and resources to the
business
Partner may bring other skill s and ideas to the
business, complementing the work already done by the
original partner
Increased credibility with potential customers and
suppliers who may see dealing with the business as
less risky than trading with just a sole trader
DISADVANTAGES
Have to share profits Less control of business
for individual
Disputes over workload
Problems if partners disagree over of direction
of business
Limited company
Business owned by shareholders
Run by directors (who may also be
shareholders )
Liability is limited (important)
Setting up a limited company

Company has to register with Companies
House Issued with a Certificate of
Incorporation
Memorandum of Association-describes what
company has been formed to do
Articles of Association- internal rules covering:
What directors can do
Voting rights of shareholders
Controls of a company
Shareholders own company
Company employs directors to control
management of business
The directors may also be shareholders (most
are)
Directors are responsible to shareholders
Have a duty to act in best interests of
shareholders
Have to account for their decisions and
performance (Accounts)
Importance of limited liability
Limited liability means that investors can only
lose money they have invested
Encourages people to finance company
Those who have a claim against company:
Limited liability means that they can only recover
money from existing assets of business
They cannot claim personal assets of shareholders
to recover amounts owed by company
Separate ownership and management
of a company
Shareholders may have money
May not time or management skills to run
company
Day to day running of business is entrusted to
directors
Directors employed for their skills &
experience
Differences between a private and
public limited company
Shares in a plc can be traded on Stock
Exchange and can bebought by members of
general public
Shares in a private limited company are not
available togeneral public
A private limited company may have a smaller
(or larger) capital.
Disadvantages of being a plc
Costly and complicated to set up as a plc
Certain financial information must be made
available for everyone, competitors and
customers included
Shareholders in public companies expect a
steady stream of income from dividends
Increased threat of takeover
Reasons for a private limited
company to become a plc
Shares in a private company cannot be offered for
sale to general public
Restricts availability of finance, especially if
business wants to expand
It is also easier to raise money through other
sources of finance e.g. from banks.
Note: becoming a plcdoes not necessarily mean
that company is quoted on Stock Exchange
To do that, company must do a flotation
Flotation
When shares in a plc are first offered for
sale to general public
Company is given a listing on Stock
Exchange
Opportunity for company to raise substantial
funds
Complex and expensive process
Risks faced by company
shareholders
Company reduces its dividend or pays no
dividend
Value of share falls below price shareholder
paid
Company fails and investor loses money
invested
Main forms of co-operative
Three main types of co-operative
Retail co-ops
Marketing or trader co-ops
Workers co-ops
Examples:
Co-operative Retail Society
Farmers co-operatives marketing and distributing food
products
Small business credit unions
Artists
co-operatives sharing
studio and exhibition facilities
Examples of franchises in the UK
McDonalds
Clarks Shoes
Pizza Hut
Holiday Inn
Franchises
The franchisor is the business whose sells the right to another
business (franchisee) to operate a franchise

Franchisor may run a number of their own businesses, but also may
want to let others run the business in other parts of the country
A franchise is bought by the franchisee

Franchisee required to invest often around 10,000 -50,000 in
acquiring the franchise licence and setting up the business
Once they have purchased the franchise they have to pay a
proportion of their profits to the franchisor on a regular basis

Depending on the business involved, the franchiser may provide
training, management expertise and national marketing campaigns
Advantages and disadvantages of
franchising
Advantages
Tried and tested market place, so should have a customer base
Easier to raise money from bank to buy a franchise
Given right and appropriate equipment to do job well
Normally receive training
National advertising paid for by franchisor
Tried and tested business model
Dis advantages
Cost to buy franchise
Have to pay a percentage of your revenue to business you have bought
franchisor have to follow franchise model, so less flexible
Reasons why franchising has
become more popular
Large companies have seen it as a means of
rapid expansion
Franchisee provides most of finance reduces
investment in expansion
Local entrepreneur with inherited or
redundancy money sees opportunity to set up
business with reduced risk
Banks like combination of large company and
small local business as a reduced lending risk.
Reasons for public sector
organisations
Provide essential services not fully provided
by private sector
Prevent exploitation of customers
Avoid duplication of resources
Protect jobs and maintain key industries
A Club-NON-Profit Organisation.
A club is a voluntary association of individuals for social
purposes of recreation or for advancement of such objects
as donation, useful arts, politics, or protection and
development of their common interest, etc
It has a definite organization which continues in
consistence for an undetermined time and
It is governed by certain rules, regulations, deed of
settlement or bye-laws to which the members conform.
The purpose- improving the legal condition or societies
established for the promotion of literature, science, or the
fine arts, or for the diffusion of useful knowledge, [the
diffusion of political education], or for charitable purposes

Members Club/Proprietary Club
In members club the properties of the club vest in
the members, and may be an unincorporated
society or may be registered under the Indian
Companies Act, or Societies Registration Act
1860.The words in Act 21/1860 are to be
understood as including religious purposes also.

In an a proprietary club. individual or a firm or a
limited company owns the property while the
members are allowed to make use of that
property on certain terms
Workings of CLub
The management of the affairs of the club
shall be in the discretion of the managing
committee inclusive of the said office-bearers
whereas the chairman of the club shall
preside if present and in his absence a
member of the committee
Liability of the club
The member shall not be liable personally for
goods supplied to or obligation incurred by
any officer of the club on behalf of the club
but the property of theclub shall be liable to
meet such debt, or obligation in the hands of
the managing committee.
Dissolution of a Club
On the dissolution of the club the properties
of the club shall be disposed of as may he
determined by the members at the meeting
where the resolution of dissolution is passed.
Through the World Leadership Alliance-Club de Madrid we make ourselves available
to address issues of national democratic government, transnational governance and
collective action on issues of the global commons
Trust
There are essentially two distinct classes of
not-for-profit organisations:
(a) organisations with members and an
executive or board;(here -structured and governed in
accordance with democratic principals and have a governing board
or committee, which is answerable to the members of the
organisation)
(b) trusts with trustees or a trust board(is not
governed on democratic principles, are not accountable to a
membership )
A trust is most commonly established by a trust
deed as per Charitable Trusts Act 1957
the Charities Act 2005 now contains legislative
requirements
Trust shall be governed by a Board of Trustees
comprising the Trustees for the time being of the
Trust.
The Board of Trustees shall comprise no less than
five (5) and no greater than seven (7) trustees.


Akshaya's Helping in H.E.L.P. Trust (aka Akshaya Trust) is based
and registered in Madurai, India as a charitable trust. All rights
reserved.

Association
Can be Association of Persons(AOP) and Body of
Individuals(BOI)
AOP under income tax is a entity or unit of
assesment. It means two or more persons who
join to earn more income. The term person
may mean body of individuals, company or
association of persons whether incorporated or
not.
AOP has a common design or will to engage in
income generating activity.
BOI means a conglomerate of persons who carry
some activity with an intention to earn income. It
consists of only individuals, companies and firms
cannot be member of BOI.
When firms, companies and individuals,HUF join
together to earn income, it become AOP.
But when only individuals joins it become BOI
BOP need not have common design or will to
engage in income generating activity.

The Jewellers Association Bangalore was established on 11th February
1938 with a humble beginning of 14 illustrated jewellers. The Association
was housed initially at Nagarthpet Bangalore where on 20.11.1940 the
Diamond Madyastham Weighment Section was inaugurated.


The Main Objectives:


Promote Trade and enhance Trade Values.
Develop Special and Ethical Discipline among Jewellers.
Encourage Designer and Craftsman.
Create friendly atmosphere between Smiths, Trades and Customers.

The Services presently rendered by the Association to its members are:


Notify Gold and Silver prices everyday via SMS (India's only Association to implement this service for the benefit of its members)
Assaying of Gold and Silver.
Weighing of Gold, Silver and Diamonds.
Appraisals for Gold and Silver Jewellery Exports (Customs Approval).
Redress Problems relating to Trade.
Conduct Trade related Seminars.
Conduct Jewellery Designing, Testing and Manufacturing courses.
Conduct Gem Identification and Diamond grading courses.
Liaison with Governmental bodies and Tax authorities for betterment of the Trade.
Updating members with latest Government Notifications related to the Trade.
Release of Quarterly Trade related News Letters.
Stall discounts for members participating on various Trade shows.
Trade related Educational Tours.
Appraisal of export and import consignments form bengaluru port.
Appraisal of seized gold/gold jewellery by customs.
Appraisal of personal jewellery carried by foreign bond passaengers.