Business Law Task 2: Private and Public Business Organizations

This report provides an overview of various business organizations, encompassing both private and public sectors. It explores different legal structures like sole proprietorships, partnership firms, limited companies, and Limited Liability Partnerships (LLPs), detailing their advantages and disadvantages. The report further examines how these organizations are managed and funded, discussing the roles of owners, partners, directors, and the sources of funding available to each type, including social enterprises and public corporations. The conclusion highlights the diverse characteristics of different business entities and their impacts on society. References to corporate governance and legal frameworks are included.

Business Law
(Task-2)

Content
 Introduction
 Different types of business organizations in both private and public
sector
 Advantage and disadvantage of different legal structure
 Explain how the business organizations are managed and funded
 Conclusion
 References

Introduction
There are different types of business organisation which have different
nature of performing the business activities. These includes private,
public etc. having different merits and demerits. It is the choice of
investor that in which sector they want to invest there capital for
conducting the business activities.

Different types of business organizations in
both private and public sector
Sole proprietorship- It is an
unincorporated business owned and
managed by a single person who is
termed as sole proprietor or sole
trader. The law does not distinguish
between the entity and the owner.
This means that there is no
requirement of registration.

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Partnership firm- It is an association of
the people who are called partners to
form a firm, carry the business
lawfully and share the profits of a
business. It has main features which
should be there in order to incorporate
a partnership firm.

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Limited company- Law has identified
company as an artificial entity which
is different from its members. It is
the feature of distinct or separate
legal identity which gives powers to
the company to acquire and sole
properties, open own bank account,
enter into contracts on its own.

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Limited Liability Partnership (LLP)- The
hybrid form of a company and a partnership
firm is known as LLP which combines the
features of the provided entities. The
members are called partners who have
limited liability just like the shareholders in
the case of a company.

Advantage and disadvantage of different legal
structure
Types of organisation Advantage Disadvantage
Sole Proprietorship Work can be easily managed. Doesn’t have the power to
sue and be sued.
Partnership Decisions can be easily taken. Disputes can be raised while
distributing the power.
Limited Company Fund can be easily arranged. Number of legal formalities
are needed to be done.
Limited Liability Partnership Liability is limited in it. Doesn’t have the right to
exceed the maximum number
of members.

Explain how the business organizations are
managed and funded
Sole proprietorship- The organization is simple and generally, the size
of business is smaller. This is why the management becomes easy
which is done by the sole trader all alone. Decisions are taken and
implemented by the owner however, family members or other
individuals can be appointed for carrying activities on daily basis
that too on the instructions of the sole proprietor.

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Partnership firm- Partners are the people who form a partnership firm
hence, they are the individuals who have the authority to make
decisions, enter into contracts, take actions etc. with an objective to
apply to the firm. Apart from this, every partner is required to share
the liability jointly and severally.

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Limited company- It is an artificial person which cannot act, make
decisions, manage the daily activities etc. Therefore, it appoints
directors who act as an agent of the corporate and carry their work
according to the directions and instructions of the company. They
are provided certain rights, duties and powers as per the Companies
Act and the Memorandum of the body corporate.

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Limited Liability Partnership (LLP)- It is administered by the partners
who have established it. The activities are handled by the partners
by making decisions which are applied for meeting the objectives.
In addition to this, the sharing of liability is similar to that of a
partnership firm.