business function- business environment

1-What's an organisation?

is a group of people who work together to achieve a common goal. Every organisations have different set of objectivities

Some organisation are….

-profit making and some are n.on-profit (charities or government agencies)

An example of a profit making

Coco-Cola bottling company

An example of a charity:

British heart foundation

Common features of business organisations:

a vision and a mission

-a goal and targets

-customers and suppliers

-other stakeholders

-culture formed by organisational values

Types of organisations:

Sole traders

-partnerships

-Limited liability partnership (LLP) and limited partnership (LP)

-PLC: public limited companies

-PLG: Private limited companies

-Not for profit organisations

Sole traders:

Are individuals who run and own the business. And are completely responsible for it.

Partnerships:

Are a number of individuals working together in a business and sharing the profit/ losses.

LLP and LP:

Are a number of individuals working together which can be incorporated as a separate legal entity

PLG: .

Is an incorporated business with its own separate legal identity that’s owned by shareholders and run by directors. The shares aren’t traded on a stock exchange

PLC:

Same as PLG but the only difference is the shares are shared on a stock exchange.

Not for profit organisation:

Are organisations that are run by trustees for charitable purposes or for public sector organisations to provide public services for the community.

Sole trader-Advantages

the owner has independence and can run the business by themselves

-After business expenses, all profits belong to the owner

In a small business, if there are employees, personal service and supervision by the owner are available at all times

-The business is easy to establish legally either using the owner’s name or a trading name

- the business is easy to establish legally-either using the owner’s name or a trading name

Sole trader-disadvantages

- has unlimited liability for the debts of the business, the owner’s personal asset can be used for any insolvent (debts owned)

 -all losses are the owner’s responsibility

 -expansion is limited

-the owner usually has to work long hours and may be difficult to take holidays and if the owner is sick, the business will either slow down or stop

Partnerships advantages

there is a possibility of increased capital (money)

-when there’s more people running the business, they can cover for whoever is sick or is on a holiday

-when more people work together, they can focus on the areas of the business they’re good at

Partnerships disadvantages

-making a decision can take longer as all the owners need to talk and agree together

-there may be disagreement amongst all the partners

-each partner is responsible for the business debts and dealings

-retirement/ death of a partner may affect running the business

Limited companies advantages

-there is a limit on the liability for the members of LLP and shareholders for the amount they invested

-it may be easy to access finance

-the business keeps going on its own as a separate legal thing

-the business seems more relaible and trust worthy

-transferring the ownership of the business may be easier

Limited companies disadvantages

-there may be more difficult requirements of setting up a business and it can cost more to keep up with record-keeping and annual assets

-any info filled with the companies house is the public domain and anyone can access the financial and other details

-the business finances must be kept separate from the owner’s money

Companies limited by shares must file certain documents with the registrar at Companies House including:

-financial statements, confirmation statements and copies of resolutions

Funding methods:

-borrowing money

-new capital

-retained profit

-working capital

What's a business?

is when people sell products or offer services to make profit (money). It is an entity, which means it exists on its own.

One person or a group of individuals can create a business.

All transactions (money activities) and records must be kept separate from the owners.

Profit .

means that revenue (sales) is higher than total costs

Loss

means that total costs is higher than revenue generated