Business Structure Lecture Notes

Overview

• The lecture discusses various business structures and their characteristics.
• Focus on the types of business structures, their sectors, and implications.

What is the Best Business to Own?

• Important to analyze what business to start with key reasons and justifications.
• Consider the business sectors: Primary, Secondary, and Tertiary.

Types of Business Structures

• Division by Ownership:
  • Private
  • Public
• Private Sector Subdivisions:
  • Sole Trader
  • Partnership
  • Joint Venture
  • Franchise
  • Social Enterprise

Limited Company

• Defined as an organization separate from personal finances.
• Profit ownership after Corporation Tax.
• Ownership:
  • Members (shareholders) and Directors.
  • Shareholders' liability is limited to unpaid shares.
  • Directors not personally liable for unsatisfied debts if legal.

Partnerships

• Ordinary Partnerships:
  • Share responsibility for profits and losses.
  • Personal tax obligations.
• Limited Partnership and Limited Liability Partnership:
  • Limited Partners liability limited to initial investment.
  • LLP partners not personally liable beyond their investment.
  • Responsibilities outlined in LLP agreement.
  • Tax obligations include partnership and personal tax returns.

Joint Venture

• Business arrangement to pool resources for specific tasks.
• Separate entity from participants' other business interests.

Franchising

• Combination of sole proprietorship elements.
• Types of Franchising:
  • Product/Trade Name Franchising
  • Business Format Franchising

Individual Work Suggestions

• Represent main legal structures: sole trader, partnership, limited company, limited liability company.
• Prepare a table of advantages and disadvantages.
• Discuss how changing structures impacts business operations.

Key Takeaways

• Understanding different business models and their legal implications is crucial for strategic business decisions.
• Each business structure has unique tax responsibilities, liability, and profit-sharing mechanisms.

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This summary serves as a condensed version of the key points from the lecture on business structures by Tatjana Vilek.