Text A. Different types of companies.

Date: 2015-10-07; view: 569.

Companies are involved in many activities, for example buying, selling, marketing and production, in a range of different industries, such as information technology, telecommunications, film, and car manufacture. Many well-known companies are multinationals with subsidiaries and assets in various different countries and they generally engage in mergers with other companies and acquisitions in order to expand. However, the large corporation is increasingly under threat from the growing number of dotcoms set up by entrepreneurs.

Before entering business a new businessman must have some understanding with types of companies. The differentiation between public and private sectors' organizations is very significant in order to know their different features, aims and objectives, and scope of work.

I. The Public Sector's organizations are budgeted and run by state. They are often called as state organizations. The primary objective of these organizations is to serve the public not to earn profit. Finances are offered freely for society. Organizations of public sector include educational institutes, health services, security providing organizations, national defense, financing etc.

II. The Private Sector includes organizations whose objective is to make profit and is divided into two kinds:

1) Non-Limited Companiesthatdo not involve complicated business concepts. The owner is personally responsible for all of the debts if the business fails. Non-limited companies are free of legal bounding. There are two types of such “businesses”:

A sole proprietorship is a business owned by one person. It's the simplest way of starting a business. Most are small firms such as grocery stores, restaurants, petrol stations, hairdressing saloons, and drugstores.

A partnership is a business owned and managed by a small group, often not more than two or three people, who become partners. By written agreement, these partners share the profits or losses and they are responsible for the debts of the partnership.

2) Limited Companies can be either privately owned when they are referred to as Limited (Ltd) or publicly owned. Some publicly owned can sell shares to members of the public on the stock exchange, unlike Ltd's that cannot do in the same way. The liability for both limited and publicly owned companies is restricted. This means that in case of failure of any company, the liability of the company's shareholders is limited to the value of the shares and not to the personal funds or assets of the business owners.

A corporation is a business company owned by a number of people and operated under written permission from the state in which it is located. The written permission is called a certificate of incorporation. The corporation acts as a single individual on behalf of its owners. By buying shares of stock, people become owners of corporations. They are then known as stockholders or shareholders. A corporation may have very few owners, but most corporations have many owners. Large corporations, such as IBM, General Motors, may have a million or more owners. Even if you own just one share of a company, you are still one of its owners. Most mining, manufacturing, and transporting of goods, supermarkets, department stores, and other businesses are organized as corporations.

Many large businesses in the UK are public limited companies (plc), which means that the public can buy and sell their shares on the stock exchange. Examples include – Marks & Spencer, British Telecom and the National Westminster Bank. The minimum share capital for a public limited company is £50,000; so many new businesses are likely to take other business forms.

Sometimes people join together to operate a business known as a cooperative. A cooperative is owned by the members, it serves and it is managed in their interest. Consumers' cooperative is an organization of consumers who buy goods and services more cheaply together than each person could individually. For example, farmers and members of labour unions may form cooperatives to buy products such as groceries and petrol and services such as insurance and electricity. Farmers also form cooperatives from which they buy products needed to run their farms.

Producers' cooperative is usually a farmers' organization that markets products such as fruits, vegetables, milk, and grains. Sometimes the cooperative operates processing plants such as canneries. A producers' cooperative lets farmers band together for greater bargaining power in selling their products.

A franchise is written contract granting permission to sell someone else's product or service in a prescribed manner, over a certain period of time, and in a specified territory. Franchises can be operated as a proprietorship, partnership, or corporation.

A franchisee, that can be a person or a group of people, receives the franchise from a parent company, the franchiser, to sell its products or services. The franchise agreement states the duties and rights of both parties. The franchisee agrees to run the business in a certain way. This often includes the name of business, the products or services offered the design and colour of the building, the price of the product or service, and the uniforms of employees. This standardizing means that customers can recognize a business and know what to expect when they buy a product or service from any one of the franchised businesses.

The franchiser helps the franchisee get started. Also, the national advertising of the product or service by the parent company serves all the franchises all over the country. For its services, the franchiser collects a percentage of sales or an agreed-upon fee from the franchisee each year.