Types Of Organisations
Bayani Gaba-gaba
From a one-person street-food stall to a multinational listed on the stock exchange, businesses come in many shapes. The legal structure a business chooses affects who owns it, who controls it, how it raises finance, and what happens if things go wrong. Choosing the right form of ownership is one of the first and most important decisions any entrepreneur makes.
In this lesson you will compare sole traders, partnerships, private and public limited companies, public corporations, franchises, social enterprises and multinationals. You will learn the meaning of limited and unlimited liability, examine why businesses change their legal structure as they grow, and evaluate the advantages and drawbacks of each form of ownership.
Manufura
- Understand the main types of business ownership: sole trader, partnerships, limited companies (private and public), public corporations
- Understand characteristics relating to size: concepts of risk, ownership and limited liability, public corporations and reasons for and against public ownership, ownership, control, sources of finance, use of profits, stakeholders and shareholders, appropriateness of different forms of ownership
- Understand different forms of business organisation: franchises, social enterprises, multinationals
Takardar Darasi
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- Which type of business ownership has unlimited liability? A) Private limited company B) Public limited company C) Sole trader D) Public corporation Answer: C
- What document must be filed to form a limited company? A) Deed of partnership B) Franchise agreement C) Memorandum of association D) Business plan Answer: C
- Which of the following is a feature of a public limited company? A) Shares can only be sold to family members B) The owner has unlimited liability C) Shares are traded on the stock exchange D) The business is owned by the government Answer: C
- In a franchise arrangement, the franchisee: A) Owns the brand name B) Sets up a completely new brand C) Pays to trade under the franchisor's brand D) Has no financial risk Answer: C
- A social enterprise differs from a regular business because it: A) Cannot make any profit at all B) Prioritises social or environmental goals over profit C) Is always owned by the government D) Has unlimited liability Answer: B
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