Organization and Environment

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ORANIZATION AND ENVIORNMENT

ANSWER 1.

Business has to be aware of the business organization to know how business operates and make decision. Business organization has a legal structure that business can adopt they are

Sole traders
Partnership
Limited liability partnership
Companies

DIFFERENCE BETWEEN SOLETRADERS, PARTNERSHIP AND COMPANIERS ARE: -

S.NO

TOPIC

SOLE TRADERS

PARTNERSHIP

COMPANIES

1.DEFINATION

Sole trader is a business venture which is owned by one person who is completed responsible for the company debts and looses. (ACCESSED FROM BUSINESS ENVIRONMENT BOOK)

Partnership is a relation of two or more entities conducting business for shared benefits. Partnership was governed by THE PARTNERSHIP ACT 1890.

(ACCESSED FROM INVESTOR WORD AND BUSINESS ENVIRONMENT BOOK)

Company is an activity which is occupied in business to systematize as a firm.(ACCESSED FROM BUSINESS ENVIRONMENT BOOK)

2. PROFIT

Business is likely to have some times profit and some time loose.

(ACCESSED FROM BUSINESSIGNITION)

Business profitability likely to be low. (ACCESSED FROM BUSINESSIGNITION)

Business profitable is likely to be high. (ACCESSED FROM BUSINESSIGNITION)

3. Risk

Business does not face any legal claims.

(ACCESSED FROM BUSINESSIGNITION)

Business faces a high risk of make unconscious legal claims.

(ACCESSED FROM BUSINESSIGNITION)

Business is at low risk of legal claims. (ACCESSED FROM BUSINESSIGNITION)

ADVANTAGES OF SOLE TRADER, PARTNERSHIP AND COMPANIES: -

SOLE TRADER: -

It is easy to start up and it does not need any specialist services.

2. The certiorari is private competitor and it cannot rectify the earnings to how the business can succeeds. (ACCESSED FROM SMALL BUSINESS)

PARTENERSHIP: -

It not needs to register at border prospect.

2. It doesn't require heavy fee for its registration. (ACCESSED FROM ALL BUSINESS)

LIMITED COMPANIES: -

“Limited liability” is most of the most important factor to protect the companies.

2. It has flexible borrowing powers.

DISADVANTAGES OF SOLE TRADER, PARTNERSHIP AND COMPANIES: -

SOLE TRADER: -

It is quite difficult for get large jobs in because companies work as a team and sole traders have only one staff member.

2. They are time consumer following up with the tenders that don't able to enjoy their business. (ACCESSED FROM SMALL BUSINESS)

PARTENERSHIP: -

In this the commitment is very unbalance in the term of TIME and FINANCES.

2. Liabilities and the business debts are personal with their partners (ACCESSED FROM ALL BUSINESS)

LIMITED COMPANIES: -

It is more costly in both the term that is TIME and MONEY to trade.

2. If the audit threshold are over then you have to pay to have audit to continue your business.

Answer 2.

A budget is the oldest way for management it is used for any kind of companies and it basically it is considered for finance organization, to raise funds for the next forthcoming project and to take the entire financial conclusion.

The basic factors that business it basically consider for business: -

Cash flow:- It show the cash position for future
Profit and loose:-They show how much profit and loose is done and in which field so that to care of in the new business.
Cost:-It basically shows the market, cost etc.
Revenue: - They prepare the charts to know the exact profit.

TIM O' NEIL, the founder of T&T vision measured the points shown above, to start his business.

Answer 3.

Businesses basically need capital for the small industries and the big industries to raise funds so that they can deal easily. Business basically use two types of finance key sources they are (ACCESSED FROM BANK OF BIZLED)

INTERNAL SOURCE EXTERNAL SOURCE

Internal source refer to the money and they are regularly preferable to such a compact in which they will frequently be cheaper and simple to position at little notice. Some of the main domestic sources are:

Profit: - Every company has some profit to start a new business. By that profit they have the ability to grow and expand it by a sum of money paid to shareholder of a corporation out of the earning so that they can increase the money easily in other form.
Reduce working capital: - The firm may increase some money for venture by dropping their stock level or they can improve their credit power and they should safe to collect their debts and keep away from delaying payment to creditors.
Sale of assets: - They depend on the value of a single item of ownership having exchange value this will have when they have a surplus and by this they can easily earn good amount of capital.

External sources refer to the raising money from exterior the firm to produce revenue.

Loans: - In this the banks start to come into play. Banks will lend loan either for short-term or long-term but the nature of the loan will be likely to differ. They are: -

* Overdrafts: - They mainly offer as an short-term facility, but it can be very precious for firms to fill short-term shortages of working capital

* Long-term loan: - It usually refers to lend over five years and the bank may want the guarantee.

* Debentures: -It is a specialized form of loan. The firm may set the level of interest. And it usually raises money and has low risk.

Shareholders: - Limited companies can issue the share. The shares can be issued at a definite price though this price and it basically depend on the profit owned by the company.

Factoring debts: -. This means that the firm sells their debts to the factoring company who pay them their debts instantly. In this way the firm raises some instant finance. (ACCESSED FROM BANK OF BIZLED)

REFERENCES

* Investor Word. (2009). Partnership. (Internet) Available: http://www.investorwords.com/3609/partnership.html. Last accessed 14th DECEMBER 2009.

* Francis Clark. (2001). Differences between sole trader, partnership and companies. (Internet) Available: http://www.businessignition.co.uk/Differences%20between%20a%20Ltd%20Company%20&%20a%20Partnership.htm. Last accessed 15th DECEMBER 2009

* Bizled. (1996-2009). Sources of Finance. (Internet) Available: http://www.bized.co.uk/virtual/bank/business/finance/sources/theories1.htm. Last accessed 13th DECEMBER 2009.

* All Business. (2009). Advantage and Disadvantages of partnership (INTERNET). Available: http://www.allbusiness.com/business-planning-structures/business/2513-1.html. Last accessed 16th DECEMBER 2009.

* Small business pro. (2009). Advantage and disadvantage of sole trader. (Internet) Available: http://www.smallbusinesspro.co.uk/small-business-finance/sole-trader.html. Last accessed 15th DECEMBER 2009.

* Tracy, B. (2004). Drafting Your Budget [Internet].Available http://www.entrepreneur.com/money/article72918.htm Last accessed 15th December 2009.