THE PRIVATE SECTOR Owned by individuals or groups of individuals, or the government has a shareholding

liability = responsibility to settle a debt a) limited liability responsibility for debts to the value of the investment b) unlimited liability the risk to sell personal assets/property to pay for business debts

Assets items of value: - cash - land - buildings - machines - jewellery - shares

TYPES OF BUSINESS ORGANISATIONS 1. Sole proprietorship / sole trade 2. Partnership 3. Limited companies/corporations a) Private limited company (Ltd.) b) Public limited company (Plc.)

1. Sole proprietorship / Sole trade unincorporated = privately owned business with no legal difference between the owners and the business

2. Partnership a) unlimited partnership (general) b) limited partnership

DOCUMENT FOR PARTNERSHIP Deed of partnership (Partnership agreement Articles of partnership)

Limited companies 1. The ownership of a limited company is divided up into equal parts called shares. 2. Whoever owns one or more of these is called a shareholder. 3. Have their own legal identity, their owners are not personally liable for the firm's debts (limited liability) 4. Owners are not necessarily involved in running the business, unless they have been elected to the Board of Directors

incorporated = have their own legal identity and can sue or own assets in their own right often a small business such as an independent retailer shares do not trade on the stock exchange. 3. Private limited company (Ltd.)

3. Public limited company (Plc.) incorporated = have their own legal identity and can sue or own assets in their own right usually a large, well-known business. This could be a manufacturer or a chain of retailers with branches in most city centers shares trade on the stock exchange.

Setting up: 1. details of the business (technical, financial, administrative) 2. lawyers draw up two documents for the Registrar of Companies

Documents for limited companies 1. The Memorandum of Association (Charter): name, type of business, premises, total share capital – for the outside world 2. The Articles of Association (Bylaws) powers and duties, issue of shares, AGM, salary and appointment of MD - for the internal purpose

Certificate of incorporation

Which companies are the following advantages for: 1.You can increase your capital by selling shares on the stock exchange. ________________________________ 2.This is a good way of sharing the pressure and work involved in starting a business. __________________________________ 3.You have total control of your business. __________________________________ 4. The financial risks that you take are restricted. __________________________________

COMPLETE THE BOXES WITH THE WORDS AND EXPRESSION FROM THE LIST BELOW: free market, raw materials, joint stock company, sole trade, retail trade, partnership, telecommunications, municipal enterprise type of business:economy: ___________________

COMPLETE THE PASSAGE BELOW: The simplest form of business is a _________________. The ___________receives all the profits and is responsible for any _________. He/she has unlimited ___________________which means that he/she can lose all the __________________ if the company goes ____________. It is difficult to ____________ money for expansion and ________________ with large firms.

TRANSLATE komanditor __________________________ Izjava o osnivanju _____________________ Nadzorni odbor _______________________ Zakon o trgovačkim društvima ______________________________________ Upravni odbor _________________________ Statut _______________________________ dioničko društvo d.d.____________________ društvo kapitala ________________________

1. RB: pp: 22 - I 23 – IV, V 24 – I, II What is the difference between limited and general partnerships? 2. What kind of business is a corporation? Compare it to limited companies in the UK. 3. If you had enough money to invest by the end of the year, which type of business would you back? Why?