Business Environment
A4060519
Student´s Name: Michael Wanderley Mallmann Spanholi
Business Environment
LO1. Understand the organizational purposes of businesses 1.1 Identify the purposes of different types of organisation
The UK legislation allows different types of legal structures to do business in its area.
In the private sector, the following forms of companies can be seen:
Sole trader is a business owned by an individual who is self-employed, but staff can be hired on either a full-time or a part-time basis if necessary. E.g., newsagent´s shop, hairdressers, plumbers, photographers.
Normally, the Sole trader uses his personal funds to start the business. As it is small the Sole trader needs to decide things like type of goods to be produced or services to be provided, the area where the business will be based, what capital will be invested, how many staff (if any) will be hired, what will be the target market and so on. The management responsibility relies on a single person.
Where the business became profitable, all its profits accrue to the owner, but if the business has a loss, all its losses are the Sole trader responsibility as one of the specifications of this legal structure says that the Sole trade has unlimited personal liability. It happens due to the Sole trader do not have a separate legal existence from their owner. Even with this disadvantage, sole proprietorship is the most popular form of business organisation numerically in the UK and probably one of the reasons of this is because it is relative ease to an individual to establish this type of business. To set up a business, a name needs to be chosen, there are some restrictions that can apply and the name of the proprietor must not be used. According to www.gov.uk, the Sole trader must register with HM Revenue & Customs (HMRC) as soon as they can after starting the business, but the register to VAT – Value Added Tax is just compulsory if the turnover exceeds a certain figure. (E.g. £
Student´s Name: Michael Wanderley Mallmann Spanholi
Business Environment
LO1. Understand the organizational purposes of businesses 1.1 Identify the purposes of different types of organisation
The UK legislation allows different types of legal structures to do business in its area.
In the private sector, the following forms of companies can be seen:
Sole trader is a business owned by an individual who is self-employed, but staff can be hired on either a full-time or a part-time basis if necessary. E.g., newsagent´s shop, hairdressers, plumbers, photographers.
Normally, the Sole trader uses his personal funds to start the business. As it is small the Sole trader needs to decide things like type of goods to be produced or services to be provided, the area where the business will be based, what capital will be invested, how many staff (if any) will be hired, what will be the target market and so on. The management responsibility relies on a single person.
Where the business became profitable, all its profits accrue to the owner, but if the business has a loss, all its losses are the Sole trader responsibility as one of the specifications of this legal structure says that the Sole trade has unlimited personal liability. It happens due to the Sole trader do not have a separate legal existence from their owner. Even with this disadvantage, sole proprietorship is the most popular form of business organisation numerically in the UK and probably one of the reasons of this is because it is relative ease to an individual to establish this type of business. To set up a business, a name needs to be chosen, there are some restrictions that can apply and the name of the proprietor must not be used. According to www.gov.uk, the Sole trader must register with HM Revenue & Customs (HMRC) as soon as they can after starting the business, but the register to VAT – Value Added Tax is just compulsory if the turnover exceeds a certain figure. (E.g. £