Aldi is a private business which is owned by private individuals, with aims such as to make profit and expand, finance comes from the owners own money and or the businesses profit. Also Aldi is in the ‘Tertiary sector’ which provides services to other businesses or customers by selling the finish product. Aldi is a private limited company (LTD). As well as Aldi are a limited liability business which means that the owners are legally responsible for its debts only to the extent of the amount of capital they invested. The other company I am doing is Macmillan.
Private companies have a relatively small number of shareholders and do not offer or trade shares to the general public. The Purpose of a Limited partnership organisation is to make profit, Limited partnerships are usually owned by two or more people, which they finance and run join tly for personal gain, in this type of organisation. Profits are shared equally. A Public Limited company (PLC) this organisation is similar to a structure of a private company, however their purpose involves a more long-term strategy for profit making. Shareholders own PLC’s, and unlike private limited companies these are advertised to the public.
In capitalism individuals own private property and therefore have the authority to sell it. Entrepreneurs are allowed to start, operate and own a privately owned business. Entrepreneurs are also allowed to hire anyone who is willing to work for them. This type of economy is most commonly seen in free enterprise system, like the United States. In a capitalist economy, the government will only step in to put in place safety regulations or whenever a company needs them.
Proprietorship has three important advantages: it is easily and inexpensively formed; its subject to few government regulations and; its income is not subject to corporate taxation but is taxed as a part of the proprietor’s income. Limitations include: difficulty obtaining capital needed for growth; having an unlimited personal liability for business debts can result in losses that exceed the money invested in the company and; life of a proprietorship is limited to life of its founder. For these reasons sole proprietorship is used mainly for small businesses. A partnership exists when there are two or more persons or entities associate to conduct non-corporate business for profit. Partnership agreements define the ways that any profits and losses are shared between partners.
Businesses contribute to the national wellbeing and the unit considers the purposes of these different businesses. Businesses are organised differently. The largest businesses operate globally. Others may wish to remain small and free from too much legal control. The smallest businesses, for example, individuals providing an ironing or gardening service, may be run from the owner’s home and have a limited sphere of operation.
It is difficult for a proprietorship to obtain large sums of capital; 2. The proprietor has unlimited personal liability for the business’s debts 3. The life of a business organized as a proprietorship is limited to the life of the individual who created it. 2- Partnerships with the advantage of its low cost and ease of formation The disadvantages are: 1. Unlimited liability; 2.
Mayfair Sports, based in Kingsbury, North West London, is a local, private limited company that operates in the tertiary sector. Being a local business in the tertiary sector means that they trade in one area, providing goods for sale to the local community. This helps them to achieve their business purpose which is ‘to provide the local community with affordable sportswear, as well as school uniforms and PE kits for pupils of the surrounding schools’. As a private limited company, Mayfair Sports do have shareholders; however, their shares are not available to the general public and have been sold to a select few family members of the business owner. Whilst Mayfair Sports only has a select few shareholders it does, in fact, have numerous stakeholders, all of whom can have an influence on a business’ purpose.
P1 – Describe the type of business, purpose and ownership of two contrasting businesses. There are many different business types in the business environment; I am going to start this assignment by explaining what the difference is between local, national, international and global businesses are. A local business is usually specific to one area, generally only the local people buy the products or use the services of this business as it is not a chain of stores or a huge corporation. An example of a local business is a small newsagent owned by the person living above it, the owner owns no other shops of the same type therefore it is known as a local business. A national business is higher up than a local business, instead of the products and services being available in only one area, they are available all over one country.
For this, you must have expertise in finance. b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form. | Advantage | Disadvantage | Sole proprietorship: | -easily and inexpensively formed-subject to few government regulations-income not subject to corporate taxation | -difficult to obtain capital needed for growth-unlimited personal liability-life of proprietorship limited to life of founder | Partnership: | -easily and inexpensively formed-subject to few government regulations-income not subject to corporate taxation | -difficult to obtain capital needed for growth-unlimited personal liability-life of proprietorship limited to life of founder | Corporation | -unlimited life-easy transferability of ownership interest-limited liability | -corporate earnings may be subject to double taxation- more complex and time- consuming than creating a proprietorship or a partnership | c. How do corporations go public and continue to grow?
According to "Accrual" (2012),” Cash-basis accounting does not recognize promise to pay or expectations to receive money or service in the future, such as payables, receivables, and prepaid expenses”. Cash basis accounting is a simple and inexpensive method to implement and utilize. Small business owners without a strong accounting background often use cash basis accounting. Even though, both cash basis accounting and accrual basis accounting are approved accounting methods for tax purposes, only accrual basis accounting is generally accepted accounting principles (GAAP). Generally accepted accounting principles requires certain companies to use the accrual basis accounting to