Understanding Different Business Types

There are many business types of organisation, these all have their advantages, so it is important to know which is better for which task, otherwise a company may find some aspects harder than they should be. The main business types are;

Business Types  

  • A Sole Trader is a business owned by an individual, It can have many employees. Common sole traders could be corner shops or man-with-van businesses.
  • A Partnership is a business owned by two or more people (usually up to 20), the ownership of the business is split between them. A partnership may be a small manufacturing company or some large accountancy firms have larger quantities of partners.
  • A Franchise is a business that is owned by a franchisor, and the licensing to use the brand name is given to the franchisee to sell products under their name. Common examples would be fast food restaurants or garages.
  • A Private Limited Company (or ‘LTD’) is a company that offers shares, but does not sell them to the general public. Generally they will have either small amounts of capital, or very large amounts. The size of the business can vary, and can be a multinational company or a medium sized business.
  • A Public Limited Company (or ‘PLC’) is a company that sells it’s shares on the stock exchange, allowing members of the general public to invest capital into the business.
  • A Co-operative is a business set-up to serve the public, and may have ethical goals, over profits and sales. Some supermarkets work in this way.
  • A Social Enterprise is a business who’s money goes toward a social goal(s). Examples would be a company supporting people with an illness or disease.
  • There are also Lifestyle Businesses who’s owners work as part of their lifestyle. This can depend on the characteristics of the entrepreneur.

Most of these business types operate on two different types,

  • Limited Liability is when only the Business assets can be taken to recover debt. Limited Liability is where the owner is protected from any trouble the business suffers, and vice versa.
  • Unlimited Liability is when the business is not protected from such problems, and if the business were to get into financial trouble or insolvency, then the owners assets could be taken as a circumstance.

An LTD (Private Limited Company), must send a Memorandum of Association and Articles of Association. To receive a Certificate of Incorporation and Limited Liability. Becoming Incorporated means that the company and the owner are seen as two separate entities legally.

To be Unincorporated, would mean that the business and the owner are seen as one legal entity.

Limited Liability
AdvantagesDisadvantages
  • The owner is not responsible for the debts of the company.
  • The business is not effected by the owners problems.
  • Sole traders may find it easier to secure trade credit as it is checked against your credit rating.
  • The owner has to pay Corporation Tax.
  • It usually takes time to register.
  • There may be additional cost as the owner may have to hire an accountant.
  • The owner may face troubles moving profits or assets from the company to him.
  • It may be harder to secure good trade terms with suppliers as they may see the company as a potential liability.
  • This means your business type is Incorporated.

 

Six things ICT Provide

ICT is used globally, and has multiple points that are useful to it.

 

Fast Repetitive Processing allows companies and individuals to process large quantities of data at once and quickly, repetitive tasks allow for people to make personalised and tailored reports and information, things like bank statements can be processed rapidly overnight at low points in the day. New technologies mean that they can perform complex calculations quickly and effectively.

 

Vast Storage Capacity means that IT systems can store larger quantities of data in smaller form factor, large businesses are able to store large quantities of data and programs are able to actively process larger quantities of data such as virtual machines or hypervisors. Additionally It has allowed for free services to store files for free, using ad supported media.

 

Improved search facilities have allowed for people to lookup information and files instantly and obtain key information effectively, such as facts and simple calculations through Google and other search engines. Additionally It has allowed for data to be collated together, such as viewing reports and files over a period of time or created by a specific editor. Doctors, for example are able to lookup a patient’s details on a computer instantly, rather than go through paperwork and personal information, they are only able to see what is necessary, this allows for additional security and customisation with reports.

 

Improved presentation of data allows for tailored reports, statistics, graphs and files. Customisation has allowed business to tailor their products and software to their customers based off the data obtained. for example, a coffee chain is able to gain knowledge of their best selling drinks based off sales data and survey information, additionally they are able to combine independent data that would otherwise not be combined, such as weather and sales. It also means that it is easy to understand for someone who does not have a great understanding of a topic.

 

Improved accessibility means that information is available in a variety of formats and has allowed for people to access their data anywhere in the world, previously data was only accessible at one location, but by connecting to the vast internet, consumers as well as businesses are able to take advantage of fast connections and information in order to overcome logistical problems such as storage capacity and even uptime through online hosting, additionally people are able to utilise single peripherals on multiple devices, such as a printer or scanner. Additionally programs are easier to use and accessible to people with special needs.

 

Improved security has meant that files and programs are safe from third party transit prying eyes and nefarious use, data can be almost impossible to access without the right information and can be stored in ways that mean that it is not possible to decrypt remotely. It has also allowed for networks to be open to multiple tiers of people, from guests to teachers accessibility is only available to those who need it and useability is not compromised.