Responsibility of the business
They would usually create a partnership, which is formed by signing a deed of partnership while being supervised by a solicitor. This deed of partnership allows a maximum of 20 people to come together and share the workload and responsibility of the business. The deed also sets out profits and duties for each person. The main disadvantage of a partnership is that workers may fall out. This is a problem as large amounts of capital can rarely be borrowed. A limited liability partnership can increase the amount of partners as can reduce the risk of debts for individual partners.
Similar types of business known as worker co-operative where its workers own the company also have limited liability. To become a member you must buy a share in the organisation in reward you receive a share of profits and one vote in making decisions. This is also know as a private limited company where shares can only be sold within the company. Audi being one of the largest cars manufactures give you the choice of purchasing shares it their business. This type of company is known as public limited company. This can be useful as large amounts of capital can be raised.
In contrast Oxfam are charitable trust, when profit is used to help a good cause. The charity work is overseen by a group of trustees who are volunteers with a reputation as responsible citizens. There are other types of company in addition such as franchises where somebody can open a ready-made business. Franchisees usually pay a fixed sum for using the established brand and business model such as McDonalds. People with an interest in a particular business or organisations are known as stakeholders. For example if a person likes Audi’s cars and buys them, they are known as the customers.
Customers are key stakeholders in the running of the business, as they expect nothing more than high quality cars and value for money. Companies need employees so they provide them with their livelihood to create a successful company for example Audi may give a discount to their employees. If their any problems for the employees they can ask for help from their trade union. The trade union’s main job is to secure higher wages and better working conditions. However employers also need guidance when they have problems so they have the employers associations. They are equivalent to trade unions.
Owners such as stakeholders are regarded as the most important stakeholder. As they are risking their finical life by setting up the company and like to see their share of the profit increasing. Suppliers are another key stakeholder, as they want steady orders and prompt payment to create a successful business relationship. Governments are in favour of new businesses as they create jobs and pay taxes. However local and national communities and pressure groups are an external risk to any company as something may be non-environmentally friendly. In conclusion to my investigation good stakeholders are the main bases of a good business.