PRIVATE SECTOR TYPES OF BUSINESSES

Some considerations before...  MONEY:Savings?Borrowing? Issuing shares?  LEGAL REQUIREMENTS: Companies Act  MANAGEMENT/OWNERSHIP?  PROFITS?Sharing profits?  LOSSES? Liability limited or unlimited?

Starting a business (start-ups)  to set up  to establish  to found  to form  to start a business a company

COMPANY LAW, Companies Act  Who owns the business?  Who raises start-up capital?  Who controls the business?  Who manages it?  Who claims the profits?  Are the owners personally liable for losses?  Does the business need to publish (disclose, unveil) its accounts? ...

Words, words... Opposites?  Privately-held companies  Limited liability  Incorporated business  Legal entity (legal person)

Opposites (key)  Privately-held companies  Limited liability  Incorporated business  Legal entity (legal person)  Publicly-held companies  Unlimited liability  Unincorporated business  Natural person (physical person)

Match the two columns:  Set up  Be liable  Make  Claim  Issue  Elect  Disclose  Take over  a profit  the Board  a loss  a company  Shares  a business  the company’s accounts  for the company’s debts  profits

Key:  Set up  Be liable  Make  Claim  Issue  Elect  Disclose  Take over  a business  for debts  a profit  a loss  the profits  Shares  the Board  Accounts  A company

Example of UK 1.Sole proprietorship s. trader, s. owner, s. proprietor 2.Partnership:general partnership vs. limited partnership 3.Private-limited company (Ltd.) 4.Public-limited company (Plc.)

Answer the questions (Reader:p.?) 1.Sole proprietorship 2.Partnership 3.Private-limited company 4.Public-limited company  Who owns the business?  Who raises start-up capital?  Who controls the business?  Who manages it?  Who claims the profits?  Are the owners personally liable for losses?  Does the business need to disclose its accounts?

Answer the questions (R:p.23) 1.Sole proprietorship 2.Partnership 3.Private-limited company 4.Public-limited company  Ownership?  Start-up capital?  Control?  Management?  Claim on profits?  Liability?  Disclosure?

Describing UK businesses (R: p.23) ...is a type of business which...  It is controlled by... and managed by...  This business is financed by...  Business decisions are made by... ... has/have a claim on profits. ... is (are) /is not(are not) personally liable for... because this business has limited/unlimited liability.

Privately-held vs. publicly-held companies  Privately-held companies are owned by the company's founders, management or a group of private investors. Privately-held companies  A public company is a company that has sold a portion of itself to the public via an initial public offering of some of its stock. The company’s shares are listed on the stock exchange.public companyinitial public offering  Attention! The meaning of “public”: private sectorvs.public sector

Ideas for a presentation? US  Sole proprietorship  General partnership  Limited partnership  C corporation  S corporation  Limited liability company (LLC) ...?  Australia?  Canada?  Croatia? (compare)

Assignment When setting up a business, what are the advantages of: 1.Partnerships over sole traders 2.Sole traders over partnerships 3.Plc and Ltd over sole traders and partnerships 4.Ltd over plc 5.Plc over ltd