Types and Purposes of Different Organisations and Their Legal Structure

This presentation discusses the types and purposes of different organisations and their legal structure. It covers public, private, and voluntary sector organisations and their characteristics. The presentation also includes a stakeholder analysis and references for further reading.

TASK 1
(P1 and P2)
Business
Environment

Table of Content
 Introduction
 Types and purpose of different organisations and their legal
structure
 Size and scope of different organisation
 Stakeholders analysis
 Conclusion
 References

Introduction
 Business Environment refers to the surroundings in which
firm operates.
 It includes various internal as well as external factors that
influence operations and functions of an enterprise.
 It is crucial for managers to consider all such forces that
directly impacts upon working of business concern.
 It assists them in formulating effective plans & policies and
implementation of those.
 This assignment is based on Nestle, which is a largest food
company measured by its revenues

Types and purposes of different organisations & their
legal structure
 In business environment, different types of organisations are
working such as public, private and voluntary.
 Each one has its own purpose & legal structure which makes
it distinct from others.
 Various rules and regulations are implemented by
government that every firm should have to follow in order to
run their business successfully.

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Private sector organisation:
 These organisations are operated and controlled by private
individuals.
 In private sector, involvement of government is little or no
involvement.
 These sectors highly contributes in growth of economy.
 Main purpose of such organisations is to earn high profits
and employ more workforce than public sector.

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There are many shareholders in an organisation and each have limited liability for companies debts which leads to loose the worth of their investment in a firm. Board of directors are those who develops
organisation internally and externally. To form a company legally Memorandum of association and Articles of Association are compulsory.

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 Shareholder of private limited company has right to take part in
decision making of organisation and they can not sell shares to general
public in any circumstances.
 Business operations of these organisations are operated by Board of
Directors who are elected through consent of shareholders. Private
limited organisation is headed by Chairman.

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Company overview:
Nestle is one of the largest food company in world and offer
number of food & drink products to customers such as medical
food, ice cream etc.
Purpose of Nestle:
Main purpose of company is to earn high revenues and profits by
offering high quality goods & services to consumers.

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Legal structure of private firms:
Partnership:When two or more than two individuals collectively
start a business then it refers to partnership firms. In this, a
written document, i.e., partnership deed is signed by partners
which is a legal proof of their ownership in business.
Sole partnership: Under this, business is owned and operated by
single individual and they solely responsible for profit and
loss.

Public sector organisation
 These firms are being regulated and controlled by government of
respective nation.
 Public sector organisations are not only working for the purpose of
earning profits but, these also emphasize on development and
welfare of society.
 Health care institutions, education, electricity etc. are sectors
where public sector enterprises generally operates.
 NHS is an example of public sector organisation.

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PLC and private limited company are different in
companies context as in PLC members of general public
can purchase shares on stock exchange. Hence, it leads
to increase more finance as compare to private limited
company. Usually in case of PLC, businessman i.e.
shareholders supports PLC to generate higher profits
aids to receive good dividend per share.

Difference between public limited and private limited
company
There are some difference between private and public limited
company, some of them are as under-
 Public limited company can sell their share on registered
stock exchange to general public While members of private
company can not sell share to public.
 Public company has large amount of capital as compared to
private organisation.

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Company overview:
National Health Services is a publicly funded health care
organisation of England, United Kingdom.
Purpose of NHS:
Administer basic medical facilities to local residents as well as
visitors

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Central government: This authority regulates the whole nation.
Main aim of such legal authority is gathering tax, print
denomination etc.
State government: Functions of this authority is supported by
central government.
Local government: It is an administrative body that works for
small geographical region such as town, city or state.

Voluntary sector organisation
These organisations are not operated by single body. Voluntary
sector enterprise are non profit organisations and work only
for the purpose of society welfare. Basic characteristics of
these firms are:
 Work for society welfare.
 Autonomy for states.
 Unpaid trustees board governance.
For instance, Oxfam.

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Company overview:
It is voluntary firm and works for purpose of lowering down
poverty from world. By the assistance of volunteers,
company's operations are run. Food and other facilities are
provided by Oxfam to support survival of poor people.
Purpose of Oxfam:
Bring solutions to remove poverty.
Provide food & other facility to needy population of society.

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Legal structure for voluntary organisation
When setting up charity, number of options are available for
legal structure that can be take by organisation. These are
defined below:
Charitable firm limited by guarantee: It is the firm with
limited liability, which is registered and incorporated at
companies house.
Trust: These can be relatively inexpensive and simple to set
up in comparison to other types of charity firm.

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Charitable unincorporated association: It is an another
inexpensive and straightforward structure for charity. It is
governed by non prescribed constitution, though will require
to involve certain features like prohibition on funds
distribution to members.
Charitable incorporated organisation: This is the legal structure
which is particularly designed for charity. It is incorporated
and governed solely by charity commission which eliminates
the requirement for duplicate filings.

Size and scope of different organisations
 Public, privater and voluntary are the three types of
organisation that differs in their size as well as scope.
 Scope of business involves description about diverse
activities of firm and size includes area in which company
offer its goods and services.

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Nestle
Size of Nestle: It is a transnational food and drink company
which offer their products worldwide. It is the largest firm
measured by revenues. There are approximately 447 factories
of Nestle where its product are manufactured.
Scope of Nestle: It involves description about diversified
products offered by company to customers.

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Private limited company:
Each shareholder in private limited firm should be the part of
business and its share can be sold to general public under no
circumstances. The liability of each shareholder is limited for
firm's debts and can thus, only lose the investment value in
company. It is run by BOD and headed by Chairman.

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NHS
Size of NHS: National health services is a public sector organisation of
United Kingdom which deals in healthcare sector and provides
health services to local people of country.
Scope of NHS: It is an organisation that render basic medical facilities
to poor people of country. Along with this, it also offers optical &
dental services. Scope of NHS are defined below:
Convey information regarding health care facilities to society.
Management of funds or budget allotted for health care facilities.

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Private limited company:
Each shareholder in private limited firm should be the part of
business and its share can be sold to general public under no
circumstances. The liability of each shareholder is limited for
firm's debts and can thus, only lose the investment value in
company. It is run by BOD and headed by Chairman.

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Voluntary organisation:
Unincorporated associations: These organisations are formed
when many people collectively work together for common
purpose of public benefit. They are managed by management
and governed by constitution.
Unincorporated associations: These are formed when firm
is recognised in legislation as legal entity and it is a separate
body from its trustees

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Large businesses: Administration system, marketing department
and management structure of firm are capable of performing
functions various products or more than one product.
• Expanding range of product to exploit existing brand value is
the way of attaining economies of scale.
• One of the good example of brand extension is Easy Group.

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Small businesses: The business that is owned by one person is
considered as sole trader. It may have more then one
employee. In UK, this ownership is the most common one.
• Can offer special service to clients – example: appliance repair
specialist.
• Can be sensitive to customer's needs.
• Can cater the requirements of local people.

Stakeholder analysis
 It includes evaluation process of stakeholders.
 This concept is used in order to determine stakeholders and
their needs. Investors, customers, suppliers and government
are the main stake holders of Nestle.
 It is crucial for an organisation to fulfil needs of their
stakeholders as it assists the firm in getting support of them
for implementation of activities related to business.

References
Asif, M., Searcy, C., Garvare, R. and Ahmad, N., 2011. Including
sustainability in business excellence models. Total Quality
Management & Business Excellence. 22(7). pp.773-786.
Bhaduri, G. and Ha-Brookshire, J. E., 2011. Do transparent
business practices pay? Exploration of transparency and
consumer purchase intention. Clothing and Textiles
Research Journal. 29(2). pp.135-149.
Cavusgil, S. T., and et. al., 2014. International business. Pearson
Australia.
Chetwood, M. K.,and et. Al, 2014. Transforming a legacy IT
infrastructure into an on-demand operating environment.
U.S. Patent 8,775,232.