THE PRIVATE SECTOR

Owned by individuals or groups of individuals, or the government has a shareholding

liability = responsibility to settle a debt

a) limited liability

responsibility for debts to the value of

the investment

b) unlimited liability

the risk to sell personal assets/property

to pay for business debts

Assets items of value:

- cash - land - buildings - machines - jewellery - shares

TYPES OF BUSINESS ORGANISATIONS

1. Sole proprietorship / sole trade

2. Partnership

3. Limited companies/corporations

a) Private limited company (Ltd.)

b) Public limited company (Plc.)

1. Sole proprietorship / Sole trade unincorporated = privately owned business with no legal

difference between the owners and the

business

2. Partnership

a) unlimited partnership (general)

b) limited partnership

DOCUMENT FOR PARTNERSHIP

Deed of partnership

(Partnership agreement

Articles of partnership)

Limited companies

1. The ownership of a limited company is divided up into equal

parts called shares.

2. Whoever owns one or more of these is called a shareholder.

3. Have their own legal identity, their owners are not personally

liable for the firm's debts (limited liability)

4. Owners are not necessarily involved in running the business,

unless they have been elected to the Board of Directors

incorporated = have their own legal identity and can

sue or own assets in their own right

often a small business such as an independent retailer

shares do not trade on the stock exchange.

3. Private limited company (Ltd.)

3. Public limited company (Plc.)

incorporated = have their own legal identity and can

sue or own assets in their own right

usually a large, well-known business. This could be a manufacturer or a chain of retailers with branches in most city centers

shares trade on the stock exchange.

Setting up:

1. details of the business

(technical, financial, administrative)

2. lawyers draw up two documents for

the Registrar of Companies

Documents for limited companies

1. The Memorandum of Association (Charter): name, type of business, premises, total share capital – for the outside world

2. The Articles of Association (Bylaws) powers and duties, issue of shares, AGM, salary and appointment of MD - for the internal purpose

Certificate of incorporation

Which companies are the following advantages for:

1. You can increase your capital by selling shares on the stock exchange.

________________________________2. This is a good way of sharing the pressure and

work involved in starting a business. __________________________________3. You have total control of your business. __________________________________4. The financial risks that you take are

restricted. __________________________________

COMPLETE THE BOXES WITH THE WORDS AND EXPRESSION FROM THE LIST BELOW:

free market, raw materials, joint stock company, sole trade, retail trade, partnership, telecommunications, municipal enterprise

type of business: economy:

___________________ ___________________

___________________ ___________________

___________________ ___________________

___________________ ___________________

COMPLETE THE PASSAGE BELOW:

The simplest form of business is a _________________. The ___________receives all the profits and is responsible for any _________. He/she has unlimited ___________________which means that he/she can lose all the __________________ if the company goes ____________. It is difficult to ____________ money for expansion and ________________ with large firms.

TRANSLATE

komanditor __________________________

Izjava o osnivanju _____________________

Nadzorni odbor _______________________

Zakon o trgovačkim društvima

______________________________________

Upravni odbor _________________________

Statut _______________________________

dioničko društvo d.d.____________________

društvo kapitala ________________________

1. RB: pp: 22 - I 23 – IV, V 24 – I, II

2. http://www.youtube.com/watch?v=pPVkG9krOMI&feature=related

1. What is the difference between limited and general partnerships?

2. What kind of business is a corporation? Compare it to limited

companies in the UK.

3. If you had enough money to invest by the end of the year,

which type of business would you back? Why?