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Business structures and organizations - Coggle Diagram
Business structures and organizations
Business structures
Business in the private sector can have many different form
Partnerships
Are business owned by two or more people, with a maximum of twenty. The partnership share the responsibility of running the business, Each partner make a capital investment in the company and the profits and losses are shared
Unlimited or ordinary parternship
all of the partner take an active role in the running of the business. They are all liable for the company debts.
limited partnership
some of the partner invest capital in the company, but do not take an active role in the running of the business. they are known as sleeping partner or limited partners and they are only liable for the amount of money they originally invested.
Limited companies
the owners aren't responsible for the company's debt: they have limited liability.
the ownership of limited company is divided in share and whoever owns one or more shares is called shareholder who take part of the profits.
ther are two typed of limited companies:
Private limited companies (LTDs)
is a small business that can expand by selling shares privately to people they know
Public limited companies (PLCs)
their shares can be sold to the public and they must have a minimum of 50.000£ share capital.
In PLCs shareholders own the company, but do not control it. they elect a Board of Directors to run the business on their behalf.
Sole traders
Is the most basic and common type of business organization, is owned and controlled by one person which is personally responsible for all the company's debts (unlimited liability)
Cooperatives
are voluntary business organization owned by their members.
the members can be:
a group of producers
people who work for the organization
consumers who use the cooperative
some cooperatives operate as non-profit organization
other aim to make a profit to share among the members
each member ha one vote and are not liable for debts.
Franchising
is a type of business where someone buys the right to sell the goods or services of other established business and acquires the right to use its trademark, logo, store design, process and marketing ideas.
franchising is a joint venture between:
franchisee
who buys
fanchisor
who sell
multinational corporations
multinational or transnational corporations are large business that operate in several different countries
multinational companies often expand by merging or acquiring other smaller companies
the large company is known as parent company
its subsidiary is a smaller company that it either owns entirely or controls more than 50% of the voting share
Business need to grow if they want to remain competitive
there are two ways in which a business can grow:
internal growth
when a country uses its own resources to expand
external growth
when a business grow very rapidly through a process of integration with other organizations
merger
two or more business decide to join together to form one company
acquisition or takeover
one business buys another business
a hostile acquisition is when a company gains control over another without its consent
the company become integrated
the integration can involve business that operate in the same or different markets
horizontal integration
happens when business at the same stage of the production chain join together
vertical integration
happens when a business joins with another business that operates in different stage of production
sometimes companies decide not to merge completely, but to collaborate in a separate business project: joint venture
relocation of business
offshoring
involves the relocation of business activities from the home country to a different international location
there are two type of offshoring:
production offshoring
involves the relocation of manufacturing processes to a lower-cost destination
service offshoring
involves the relocation of support processes
reshoring
is the reverse of offshoring
involves a business returning production or operations to the country of origin