The Structure of Business

The Structure of Business
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TABLE OF CONTENT
Introduction......................................................................................................................................3
Chapter 1......................................................................................................................................3
Chapter 2......................................................................................................................................3
REFERENCE..................................................................................................................................5
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Introduction
Business structure refers to the way how business looks like and it is different in every
business as it is based on size, nature, revenue etc. this report will discuss that how start up
business can raise capital to start their business functions. Various legal structures will be
discussed with its advantages and disadvantages. Further will identify sectors in which business
can operate and the difference between each sector. This report will also discuss HR policies
and why they are important to modern organisation.
Main body
Question 1
legal statuses of businesses
PLC LTD Registered charity
Public limited company
(PLC) is considered as the
public company which is
undertaken through
corporation designation.
When it is publicly traded
corporation then it is
mandatory to use PLC after
the name of company so that
stakeholders can come to
know that it is the public
company (Viswanadham,
2018). The PLC company
lists their shares at stock
exchange so that public can
purchase it.
Ltd company is said to as
private company under which
liabilities of owners are
limited to the amount which
they had invested in the
business. So it can be said
that owners have complete
responsibility of the debts. So
company is the separate
entity. In ltd company
personal assets of the owners
are protected. Limited
company is flexible in nature
in terms of hiring employees,
appointing shareholders etc.
Charity organisation means
the organisation who is
working for the community.
There main objective is not to
make profit but to serve the
society. The income which is
made by the charity
organisation they spend on
the community welfare. The
employees which are working
in charity companies are
trained in such a manner that
they can serve to the society
in the better way.
Strengths of PLC:
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It is helpful in raising capital via issuing shares to the public. It is the most important advantage
that PLC companies can raise funds directly from the public by just listing their company on
stock exchange. It allows public to purchase the shares of the company by investing money into
the company. Through this process company can raise large amount of capital. As it widens the
base of shareholder and this is helpful in spreading the risks amongst many shareholders. It is
obvious that when shares are offered to the public then it will be purchased by many people
which will become the shareholders of the company so risk of the company will be distributed
within the shareholders.
Weakness of PLC:
It requires high level of transparency. PLC company have major detail on public domain and
shareholders demand transparency so that they can come to know that what is happening in the
company. They also have to audit their accounts. In the public domain one can find out complete
information regarding their performance. This information can be used by their rival company.
There is the possibility of arising ownership and various control issues. There are many owners
in the company as shareholders so they can transfer their ownership when they want to.
Strengths of LTD:
It is known by every one that limited company is called as tax efficient when compared with sole
trader. So that is why ltd company is the famous business model. Under the ltd company director
acquire majority of amount on which they do not have to pay the tax in the tax year. Limited
company have limited liabilities to the owner of the business. When compared to sole trader he is
completely liable for his business (Muntean, Bogusevschi and Muntean, 2019). That is why
majority of people is attracted towards this model. When business will have limited liability then
at the time of debt, private property of owners remains safe and court cannot order owner to use
his personal assets to pay the debt amount.
Weakness of LTD:
Limited company cannot be easily get set when compared with sole trader. As sole trader only
has to go for registration while ltd company have to get registered them with the companies
house. For setting the ltd company, owner also have to pay fees for that. When compared to other
nosiness structure it is found that the accounts of limited companies are complex. As on every
month director have to record the data.
Strengths of registered charity:
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