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Types of Business Organisation, - Coggle Diagram
Types of Business Organisation
Sole Trader
Formation
Easy to set up as there are few legal requirements.
Must register for self-assessment income tax.
If business name differs from sole traders name, the name must be registered with the CRO
Features
Control/Decision Making
Profits
Liability
Dissolution
Finance
Partnership
No seperate legal entity
Deed of partnership:
Features
finance
unnlimited liability
decision-making
profits
dissolution
register with CRO + Revenue
run business together
4) salary of each partner
1) each partners role in business
2-20 partners
2) how profits will be shared
3) procdure for new partners + leaving partners
Private Limited Company
Types
Designated Activity Company (DAC)
Company Limited by Guarantee (CLG)
Company Limited by Shares
Unlimited Company (UC)
Formation
Document Preparation.
Submission.
Certificate of Incorporation
Features
Profits
Dissolution
Control/Decision Making
Liability
Finance
E.g. Dunnes Stores Ltd
Co-operative
democratic
owned and run by its members
each member = equal say
7+ members
Must register with:
Register of friendly societies
Revenure Commissioners
Worker co-op
Financial Co-op
Producer Co-op
Consumer Co-op
Features:
equity finance
limitied liability
control
profits
dissolution
one vote per person
co-operation tax - 12.5%
E.g. Templeogue credit union
State Owned Enterprise
Formation
By passing an Act of the Oireachtas
The government registers the company with the CRO and the government is a shareholder.
Advantages
Provide Employment.
Provide Essential Services.
Income for the Government
Disadvantages
Lack of Profit Motive.
Loss-Making.
Management.
E.g ESB
Public Limited Company
Formation
When private limited company or other form of business seeks a stock exchange listing or quotation.
They must have a good trading history
Advantages
Limited Liability.
Finance.
Business Reputation.
Ability to Borrow.
Disadvantages
Difficult to Set Up.
Lack of Confidentiality.
Profits.
Hostile Takeovers.
Franchises
Franchiser
Franchisee
Finance - franchisee invests
limited liability
franchior has control - franchisee manages franchise
annual fee + share of profits paid to franchisee
dissolution
mutual consent
breach of agreement
E.G. Mcdonalds
Strategic Alliance / Joint Venture
Formation
When all parties enter into a contract to work together on a business project.
For a specified period of time or for a specific project
Changing Organisational Structure
To expand
To acquire skills
To reduce risks
Taxation
To raise finance