Business

GIve 5 types of business organisation

• Sole trading

• Partnership

• Company

• Coorperative

• Franchise

What is a company?

A company is an incorporated business organisation owned by shareholders.

What is ‘Companies Act’?

Companies act is a legal document that outlines the laws and regulations toset up a company

What is a share?

A share is voucher that represents a unit of capital

What is a shareholder?

A shareholder is the one who invest in a company by buyinf its shares.

What is a ‘share certificate’?

A Share Certificate is an official document that states the number of shares that shareholders have ina company.

What is ‘dividend’?

A dividend is the part of company's profit that is distributed to shareholders

What is ‘Board of Directors’?

Board of Directors are those who have been elected by the the shareholders to manage the company

What is limited liability?

Limited Liability is when the shareholders will lose only the initial amount invested in case of bankcruptcy

What is ‘Registrar of Companies’?

Registrar of companies is the authority that registers companies and issues them a certificate of incorporation allowing them to start to operate.

What is ‘Memorandum of Association’?

Memorandum of association is a legal document that provides details such as the name of the company, names of shareholders and the distribution of shares.

What is ‘Articles of Association’?

Articles of Association is a document that specifies the internal rules of a company.

What is ‘Certificate of Incorporation’?

The Certificate of Incorporation is a document that shows the official date a company can start to operarate

What is ‘Annual General Meeting’?

Annual General Meeting is a yearly meeting where shareholders elect the directors of a company and The annual report about the performance of the business is presented and approved.

Give and defin the wo types of companies

• Private limited company

A business that raises capital from a small amount of shareholders, mainly from friends and familiy

• Public limited company

A business that raises capital by issuing share to the members of the general public.

GIve 5 features of company

• Registration

The business gets a separate identity from the owner

• Ownership

Each share represent one unit of capital

• Control

• Risk

Limited Liability

• Profit

Distributed as dividend

GIve 5 advantages of company

• Limited liability

• Capital

• Continuity

• Seperate legal identity

• Management

GIve two disavantages of company

• Registration

Takes a lot of time

• Disclosure of accounts

The business privacy is no longer maintain

What is a cooperative?

A cooperative is a business organisation which is owned and run jointly by its members who share profits and benefits.

GIve 5 features of cooperative

• Registration

Should be registered at the Cooperative Division

• Ownership

• Control

Each shares has one voting right

• Risk

Limited Liability

• Profits

The profits are known as surplus, when divided it is now called dividend

Give 4 advantages of cooperative

• Employment

Create their own jobs and employment to others

• Ownership and control

Members shares ideas and help each other to manage the business

• Profits

Known as surplus

• Goverment support

Grants, loans and financial assitance

Give 2 disavantages of cooperative

• Consultation

Slow the decision making process as they should consult each other before doing anything

• Low profits

Profits are usually low as the prices charged are usually low

What is a franchise?

A franchise is an enterprise that has a license from a franchisor to start selling its product or services

What is a franchisee?

A franchisee is an enterprise that take a license of operation from the franchisor.

What is a franchisor?

A franchisor is the one who sells the license of operation to the franchisee so the latter can start to operate

GIve 2 features of franchisee

• Ownership

The franchisee buys a license from the the franchisor

• Control

The franchisee run and control the entreprise

Give three adavantages of franchise

• Strong reputation

Fewer chances of the new business failing

• Support and training

Advise, management support and training to personne offered by the franchisor

• Existing product

Most supplies are purchased directly from the franchisor himself.

GIve three disadvantages of franchise?

• Huge investment

License fees can be expensive

• Control by the franchisor

Strict rules over pricing

• Profits to franchisor

Part of the profits has to be paid to the franchisor each year