HSBC targets both large and small organizations
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Added on 2020-01-07
HSBC targets both large and small organizations
Added on 2020-01-07
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Running head: BUSINESS AND BUSINESS ENVIRONMENT Business and Business EnvironmentName Institution
BUSINESS AND BUSINESS ENVIRONMENT 2HSBC targets both large and small organizations, and each of them has different implications on the business. The advantages and disadvantages of the companies can inform thebank, on the best rules of engagement. This information is also helpful in determining who has liability over the organization, its objectives, scope, and size. On the other hand, organizational structures affect the degree of accountability, autonomy and job functions in a company.Types of organizations that would approach HSCB for loansSole traderAs the name suggests, this is a business owned by one. In the UK is the commonest form of ownership especially for start-ups. Dog groomers, bakers, hair stylists, market traders, day care vendors among others are typical examples. In the UK, one needs to go through only a few procedures, like registration, to start a sole trading business. Taxes are only charged on the profits made. This size could be large or small because the sole trader can hire workers. However, most types are relatively small in scope and number.The main advantage of a sole-trader structure is that it offers specialist services to clients.It allows the business to react quickly to customers’ needs without having to check with certain administrators; decisions are made easily. Furthermore, it is quite easy to start a sole trading business as the formal requirements are minimal. Profits are enjoyed only by the sole owner, and this can be quite motivating (Doz, 2014). The main disadvantage is that the sole trader and the business are treated as one. This means that he has no limited liability and must take on the company’s risks and debts. Therefore, creditors may come for the person’s personal assets if their business assets are unable to pay the loan. Raising capital is also a large concern for such entrepreneurs.Partnerships
BUSINESS AND BUSINESS ENVIRONMENT 3They involve two to 20 people who either bring resources or money to business. Sometimes ideas and skills are a reason to form partnerships. In the UK, a partnership deed specifying details of the firm, such as when capital will be provided, profit and loss sharing, terminating the relationship, and voting, is required. Most partnerships are relatively larger than sole trading businesses. Typical examples include service practitioners, dentist and medical professionals doing private practice, law firms, and individual retail organizations. It is not a separate legal entity (they still have unlimited liability) but is a separate accounting entity where taxes paid on profits.The main advantage of this structure is it spreads risks to several people so when in debt, it is easier to handle it. More partners infuse more resources, skills, ideas, and finance into the business. They seem credible to suppliers and customers as they are less risky. On the flipside, partnerships may cause disputes over workload and profit sharing. Some may disagree over control of the business, and there may challenge with the direction of the firm. It is an arrangement with limited life and still has unlimited liability.PrivateIt refers to an organization that is owned by shareholders and directors are appointed to run it; it also possesses limited liability. Typical examples include some insurance firms and lending institutions. In most instances, the directors happen to be shareholders, but if not, they must act in the shareholders’ best interest. Performance and decisions ought to be accounted. To set up a private company, one needs a certificate of incorporation for registration, articles of association for internal rules and a memorandum of association for the enterprise objectives.The main advantage of a private company is its limited liability which implies that investors only lose the money they put in. It encourages many investors to finance the company.
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