Legal Provisions Concerned with Business Units :: Business Management Companies Essays

Legal Provisions Concerned with Business UnitsOur client is in the process of forming a telephoner. She wishes to avoid personal liability upon any contracts she mayenter into on behalf of the proposed company. Our job is to design a report to explain the effective provisionsconcerned with the formation, management and dissolution of channelunits. The report will identify the relevant legal principles, which caninfluence the choice of business unit. inform the differences in theregulatory approach adopted for partnerships and registered companiesand describe the procedures for the dissolution of business units.At the end of the report we will advise our client what type ofcompany would be best suited to her needs. thither will also be apresentation to go with the report highlighting the main points.2.TYPES OF COMPANYThere are many different types of business unit. Each is formed by agroup of people with a super C aim. Britain has what is known as amixed economy where goods and s ervices are supplied by both privateand public sphere of influence organisations, as shown in the following diagramPrivate openingSole Trader Partnerships Limited Companies Co-operativesPrivate Public Retail ProducerPublic EnterprisePublic corporations Government Departments Local AuthoritiesThe private sector/enterprise is the term used to describe allbusinesses which are owned by individuals or groups of individuals andrun essentially for profit. About half of all transaction in Britain iscontrolled by private sector organisations. The other half known asthe public sector/enterprise are businesses which are owned andcontrolled by the government or Local Authorities and run for thebenefit of the country. The sector this report is concerned with isthe Private Sector.2.1 SOLE TRADERThis is the oldest, simplest and therefore most common form ofbusiness unit. A sole trader is one who conducts their business bythemselves either using their own name or a business name. This issomebody who is self-employed and who usually starts a business withcapital from their savings or by borrowing from friends or a bank. Capital is the money which every business needs to enable it to set upand operate, for example to buy premises, equipment, stock and paywages. The main advantage is that you can be flexible. You dontneed to discuss with others (e.g. partners and directors) how you aregoing to run the business. You also have less paperwork. A soletrader is not necessarily a one-woman(prenominal) business and may have manyemployees or branches. However, the business is owned by one personand it is they who receive the profits.ADVANTAGESDISADVANTAGES- Business affairs can be kept private except for completing tax