P4&M3 | UNIT 36 STARTING A SMALL BUSINESS |
Contents INTRODUCTION 2 Proposed legal structure of the business 2 LEGAL ASPECTS 2 Local licenses and regulations 4 The implications for the business in legal aspect (M3) 4 FINANCIAL ASPECTS 5 The implications for the business in financial aspect (M3) 8
For this task I have been asked to describe the legal and financial aspects that will affect start-up of the business
Proposed legal structure of the business
TYPES OF BUSINESSES sole trader- is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits and has unlimited responsibility for all losses and debts. Free From is my business and since I am the only owner this means it is a sole trader some of the challenges that comes with being a sole trader or starting up my own business will be finances, as a sole traders often it’s difficult to raise finance to fund my own business. Sole traders’ may also struggle with expansion in the future. Another challenge when it comes to starting up my own business would be decision making, all decisions must be made by the sole trader. There is no room for help by others. And so the success or failure of the business rests on one person.
Partnership- A type of unincorporated business organization in which multiple individuals, called general partners, manage the business and are equally liable for its debts; other individuals called limited partners may invest but not be directly involved in management and are liable only to the extent of their investments. Unlike a Limited Liability Company or a corporation, in a partnership each partner shares equal responsibility for the company 's profits and losses, and its debts and liabilities.
Plc. - A Company whose securities are traded on a stock