TOPICS TO BE COVEREDMeaning of a business organization.Types of business organization.Effects of changes in structure of business organizations.Advantages and disadvantages of the different businessorganizations.Differences between nationalization and privatization.
BUSINESS ORGANIZATION.The best way to derive the meaning of the term "businessorganization" is to focus on each word separately.. -BUSINESS : All businesses have commercial objectives. For-profit businesses sell products or services to generate revenueand earnings-ORGANIZATION: which involves businesses and other groups ofpeople not organized for commercial purposes.
SO FAR..We can say a business organization is an individual or groupof people that collaborate to achieve certain commercial goals. This is an example ofbusiness organization.
TYPES OF BUSINESS ORGANIZATION. Sole proprietorship : is a business organization owned and controlledby one person who takes full responsibility of any positive or negative effects thatmay occur.although they may employ workers. Individuals who provide a specialist service likeplumbers, hairdressers or photographers are often sole traders. Therefore these sort of businesses have advantages and dis -advantages.which would be treated in the next page
SOLE TRADER DISADVANTAGESBasically to start up a business is no big deal all you need is anyamount of cash to get on with it , but in the likeness of it most soletraders lack that kind of capital. Also sole traders are likely to get bankrupt due to the liabilities theyseem to attract . These pieces of metal are people or banks thatthe owner owes.
TYPES OF BUSINESS ORGANIZATIONA Partnership : is a legal agreement between two or several people,usually no more than 20 to own , finance and run a business jointly. , andshare any profit.There are three types of partners The general partners who share unlimited liability. The limited partners with limited liability. The sleeping partners who just provide the money to the partnership just to share the profit in return.
PARTNERSHIP ADVANTAGES The most important thing about partnership is that new ideas andimportant business invention can be jotted down to improve businessstability. Also as more partners join , the business expands and as thebusiness expands partners invest new capital into the production ofgood and services.
PARTNERSHIP DISADVANTAGES Some times a partnership can be a little rough especially whenthere is a need to decide on a produce or nailing a business deal.These sort of arguments can slow down the rate at which theorganization competes. The followings are lost in this process Time the lack of capital. Disagreements.
LIMITED COMPANIESA limited company has special status in the eyes of the law. Thesetypes of company are incorporated, which means they have their ownlegal identity and can sue or own assets in their own right. The ownership of a limited company is divided up into equalparts called shares. Whoever owns one or more of these is called ashareholder.
LIMITED COMPANIESBecause limited companies have their own legal identity, their ownersare not personally liable for the firms debts. The shareholders havelimited liability, which is the major advantage of this type of businesslegal structure.There are two main types of limited company:A private limited company (ltd)A public limited company (plc.)
TYPES OF LIMITED COMPANY: A private limited company (ltd) is often a small business such as anindependent retailer in a market town. Shares do not trade on thestock exchange. A public limited company (plc.) is usually a large, well-knownbusiness. This could be a manufacturer or a chain of retailers withbranches in most city centers. Shares trade on the stock exchange.