Business Englisch II (Fach) / legal structure (Lektion)

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• business organization satisfy needs by providing people with goods & services is a person or group of people working together in pursuit of same commercial interest try to achieve objectives use resources need to be directed must be accountable must meet legal requirements and have a formal structure
• legal business structure one of the earliest decisions affects: how much tax is paid records and accounts that must be kept liability if business fails sources of finance available the way decisions are made
• private business organizations private sector includes all businesses which are set up by individuals or groups of individuals  businesses will vary according to their legal form and ownership
• unincorporated business organization have unlimited liability no legal difference between business and owner tend to be small organizations
• incorporated business organizations have limited liability company is separated from business owner in the eyes of the law also known as limited company debts and obligations are organizations own responsibility
• sole trader most common and simplest form of BO owned by a single person 
• advantages sole trader simple and quick inexpensive to set up owner keeps all the money complete control of business worktime can be suited/tailored can offer personal service
• disadvantages sole trader unlimited liability difficult to raise additional money responsibility owner can be sued by customer risky
• partnerships simplest BO for two or more people partners share risks, cost, responsibilities share of profit and decision making
• advantages partnerships easy to set up expertise of more than one person more sources of finance no need to publish accounts better position than sole trader to raise additional funds
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• disadvantages partnerships unlimited liability profits are shared legally bound to honor decisions of the other partners size is limited to 20 partners ends if one of the partners dies or resigns unincorporated
• private limited company (Ltd.) smaller business suitable for start-ups shares cannot be advertised or traded on the stock market
• advantages Ltd. acces to funds through issue of shares higher status of business structure limited liability incorporated control cannot be lost to outsiders possible tax advantages
• disadvantages Ltd. complicated set up process profits must be shared amongst larger group of people not allow to sell shares to public need to declare business accounts to companies house
• public limited company (PLC) shares are bought and sold publicly increases market value
• advantages PLC large scale of funds can be raised production cost may be lower can often dominate market due to size banks and lenders often view a PLC as a very stale, secure type of BO pressure encourages managers etc. to perform well
• PLC public limited company
• Ltd. private limited company
• disadvantages PLC very expensive to set up initial floatation on the stock market is expensive anyone can buy shares  (possible takeover from outsiders) growth can lead to problems - lack of flexibility or loss of personal touch with customers separation of ownership and control all accounts are public
• LLP limited liability partnership
• Limited liability partnership hybrid between limited liability and ordinary partnership offer limited liability combined with tax regime and flexibility number of partners is not limited 

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