The Voluntary sector consists of mainly of non-profit making organisations this is an organisation that does not to financially reward the owner. The objectives of these types of organisations are non-financial. Businesses like the NSPCC this is a charity that is set up to help children. There are other companies like the NSPCA they are there to help animals. Most of these charities are registered charities. The majority of the people that work there are usually volunteers and are mainly from around that area and just want to help out.
But within these charity based organisations there will always be paid managers. These charities usually ask for donations on the road or they will write to you all of this is for a good cause. The voluntary sector of these businesses have a total income of i?? 15 billion, i?? 4 billion of which comes from the voluntary donations. The balance comes from charity shops and rental of properties. A Sole Trader is a business that has one owner. This is the most common form of business ownerships and is the easiest to set- up.
Sole traders can trade under the owner’s name. For example, Joan Willis the greengrocer could trade as the southern fruit centre, if they wished. The business name does not have to be registered but care must be taken not to use the same name that is already registered as a property of another business. There are a few restrictions words such as international, royal cannot be used without proper entitlement. If the business name is used the owners name must always be used on stationery. A partnership in most cases has two owners but can have a maximum of 20.
People in business such as partnerships can share skills and the workload, and may be easier to raise the needed capital. Partnerships are usually used as a form of of organisation by professionals that specialise in things such as dentists, doctors, or solicitors who find that they can offer a wider service with colleges who have different specialism Three dentist who are all partners in the practice for example a group of friends could set up a partnership to run a small business. Partnerships are entitled to trade under each others name or a name of there own choice on once they don’t choose a name that is already registered.
The same restrictions that apply to the sole trader are the same restrictions that apply to the partnerships. The partner’s real name however must always appear on the stationary. Partnerships will usually go to a solicitor to avoid any confusion and they will usually write up an agreement plan that both parties are happy with. This will usually state the amount of hours that each of them are required to work. It will also have the amount of capital each person will have to put in. Most importantly what every agreement must have on it how the profit will be shared.
The above agreements are very vital because without this, this could cause conflict between the two parties. In the absence of the partnership agreement the partnership act 1890 is used to settle disputes. A limited company is owned by its shareholders. Complains can be set up with just one director. With a limited liability company there is not set amount of shareholders there can be as much as you like. A limited company cannot be compared to the ones that I have mentioned above because they are all very different.
All limited companies must be registered with the register of companies at company’s house to whom financial information must be sent each year. This information is available for inspection by any member of the public. If someone by any chance wished to sue the company they would not be suing us the shareholders they will be suing the company this will then mean that will are safe and are stake is not at any risk what so ever. However on the other hand if they were to sue a partnership or a sole trader and they were taken to court they will be suing the owners of the business unfortunately.
If a company gets into financial difficulty and goes into liquidation the share holders tend to loose at most only the amount they have invested in the business. Their liability is limited to the amount. Even if there are unpaid debts after the business have broken up the shareholders will not be called upon to forfeit there personal assets in repayments. Limited liability was introduced in the mid nineteenth century at the time of great industrial development where share holding has a particularly bad press.
While sole traders and partnerships both own and control their respective business, a company is not necessarily run by all of its shareholders. Instead a board of directors is elected by the shareholders to run the company in a small company the shareholders may also be the directors. A large company however may have thousands of shareholders. These people have bought shares as an investment and both have neither the ability nor the desire to run a company in any case there would be far to many of then to make this possible.
The election of directors with special expertise is usually the solution. Limited liabilities give the shareholders a distinct advantage over the unlimited liability of the sole trader and partnership. From the point of view of those dealing with a company, however, there is a risk that if the business fails they may not be paid, for this reason a private limited company must display the word limited or ltd in it’s name. While a public limited company must always display the words PLC.