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Types of Organisations (OTHER (Cooperatives (Advantages (All the profit…
Types of Organisations
NON-PROFIT
Charity
Disadvantages
There is no profit within the organization. All the time you are spending in getting money will be 100% for the organization you are helping.
Advantages
In the UK the government gives you certain tax advantages for being part of an organization that gives to other. You help your community and it helps you to be a better citizen.
It is a non-profit organization to help the different communities with different needs that are not financially stable to do them for themselves.
NGO
A non-profit organization that works outside the government that aims to serve and help a cause. It is usually run by volunteers that are passionate and willing to give time and money for a cause they care about.
Advantages
Way to give back to your community or help the environment. Not applicable to federal, sales and property tax.
Disadvantages
Has to follow specific guidelines to be considered an NGO. Works only with volunteers and cannot pay employees.
OTHER
Cooperatives
Advantages
All the profit will be equally divided by the members and if the company decides to invest some part of the business so the one who buys will get profit of what the company is earning without even working.
Disadvantages
Profit will have to be splitted by the members, suppliers, and employees and if there is no legal agreement and something goes wrong between the members it can massively affect the company.
They are run by “the members”. These members are a group of people who have come together to create a business. The way all of these members get to participate in the making of important decisions is by voting or they vote for 2 or 3 members to take care of that.
Social Enterprise
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This type of business works to do something good.It has two types: Profit and Non-Profit. Profit Social Enterprises are Partnerships, Corporations, and Sole Traders. The ones that consider themselves Non-Profit do so because a big part of their income comes from trading.
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Microfinance Providers
Disadvantages
No real guarantee the individual or individuals will pay you back. You might be left broke and unable to continue your business.
Advantages
Economic growth for your community. Less malpractice in businesses because they are taught how to ethically run a business.
The practice that non-profit institutions, for-profit corporations, or cooperatives take on by lending money and providing financial service to individuals or small businesses that have no other way to acquire it. Lending in small amounts is called microcredit, and these loans can help people get back on their feet and then pay you back with interest.
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PROFIT
Corporation
A business that can be owned by many individuals that can sell parts of that company to shareholders. A Corporation is a legal entity, a whole, under the law. This means that owners or shareholders have limited liability, and are not held directly responsible for debts or charges that the company has.
Disadvantages
Difficult to manage if more than 50% is sold to shareholders. Has to pay income taxes on all profits.
Advantages
Can receive capital by selling percentages of the company. Owners and shareholders have limited liability and are not held accountable for charges.
Partnership
A partnership is a business owned by two or more people who are fully responsible of the debts and are the ones who get all the profit. Most partnerships are built on a written agreement in case something goes wrong.
Disadvantages
Some of the disadvantages are unlimited liability and there can be a lot of fighting and disagreements between the partners.
Advantages
Partners can help with the financing so you have more money. The different partners can help with different function because not everyone is good at the same things.
Sole Trader
Disadvantages
You have way much more liability when it comes to profit; if anything goes financially wrong the creditors will have to take your personal possessions. Another one is that if the owner passes away the future of the business it´s uncertain unless it has been taken care of it before.
Advantages
It is easier to organize the business because you do not have to get into any agreement with anyone else. You get to decide how to run the business and you get full profit for it.
They are people who run their own business in which is usually a small company. There is no much difference between them and their businesses when it comes to legal entity.