Business organizations

BUSINESS

ORGANIZATIONS

By Olaobaju

Abraham

TOPICS TO BE COVERED

Meaning of a business organization.

Types of business organization.

Effects of changes in structure of business organizations.

Advantages and disadvantages of the different business

organizations.

Differences between nationalization and privatization.

BUSINESS ORGANIZATION.

The best way to derive the meaning of the term "business

organization" is to focus on each word separately.

. -BUSINESS : All businesses have commercial objectives. For-

profit businesses sell products or services to generate revenue

and earnings

-ORGANIZATION: which involves businesses and other groups of

people not organized for commercial purposes.

SO FAR..

We can say a business organization is an individual or group

of people that collaborate to achieve certain commercial goals.

This is an example of

business

organization.

TYPES OF BUSINESS

ORGANIZATION.

Sole proprietorship : is a business organization owned and controlled

by one person who takes full responsibility of any positive or negative effects that

may occur.

although they may employ workers. Individuals who provide a specialist service like

plumbers, hairdressers or photographers are often sole traders.

Therefore these sort of businesses have advantages and dis -advantages.

which would be treated in the next

page

SOLE TRADER

SOLE TRADER

DISADVANTAGES

Basically to start up a business is no big deal all you need is any

amount of cash to get on with it , but in the likeness of it most sole

traders lack that kind of capital.

Also sole traders are likely to get bankrupt due to the liabilities they

seem to attract . These pieces of metal are people or banks that

the owner owes.

TYPES OF BUSINESS

ORGANIZATION

A Partnership : is a legal agreement between two or several people,

usually no more than 20 to own , finance and run a business jointly. , and

share any profit.

There are three types of partners

The general partners who share unlimited liability.

The limited partners with limited liability.

The sleeping partners who just provide the money to the partnership

just to share the profit in return.

PARTNERSHIP

ADVANTAGES

The most important thing about partnership is that new ideas and

important business invention can be jotted down to improve business

stability.

Also as more partners join , the business expands and as the

business expands partners invest new capital into the production of

good and services.

PARTNERSHIP

DISADVANTAGES

Some times a partnership can be a little rough especially when

there is a need to decide on a produce or nailing a business deal.

These sort of arguments can slow down the rate at which the

organization competes. The followings are lost in this process

Time the lack of capital.

Disagreements.

LIMITED COMPANIES

A limited company has special status in the eyes of the law. These

types of company are incorporated, which means they have their own

legal identity and can sue or own assets in their own right.

The ownership of a limited company is divided up into equal

parts called shares. Whoever owns one or more of these is called a

shareholder.

LIMITED COMPANIES

Because limited companies have their own legal identity, their owners

are not personally liable for the firm's debts. The shareholders have

limited liability, which is the major advantage of this type of business

legal structure.

There are two main types of limited company:

A private limited company (ltd)

A public limited company (plc.)

TYPES OF LIMITED

COMPANY:

A private limited company (ltd) is often a small business such as an

independent retailer in a market town. Shares do not trade on the

stock exchange.

A public limited company (plc.) is 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.