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- Online English Lesson Plans, Lesson Material and Ideas for "Culture of
English Speaking Countries Lessons", Xiangtan Normal University...
WESTERN CULTURE AND SOCIETY: THE UNITED KINGDOM (UK) -
British Business Organisations:
UK organisations are divided up into two types: PUBLIC SECTOR and PRIVATE
The Public Sector:
Public Sector organisations are financed by the state, for example
hospitals, libraries and schools, as well as national defense and the
police. they do not operate in order to make a profit.
The Private Sector:
Private Sector organisations are owned by individuals or groups of
individuals. These firms can be large or small, owned by one person or by
thousands. By producing and selling their goods or services, they attempt to
make profits for their owners.
Businesses which operate
in the private sector have a number of objectives or goals. The owners will
want their business to survive in a competitive market. They also want to
make a profit - if losses are made in the short term, they may continue to
trade in the hope that in the long term the business will improve. Another
objective might be to gain a larger market share, they might therefore have
to reduce prices in the short term and suffer temporary losses.
Because private sector
businesses are set up to make a profit, this encourages people to invest in
existing businesses, by buying shares, or to encourage them to set up their
There are four main
types of organisation in the private sector:
These are the most common type of organisation in the UK. They are owned and
controlled by only one person. That person provides all the capital (money),
and may work alone, or might employ others. Formation of a sole trader
business is quite easy. Sole traders normally provide specialist services,
such as plumbers, carpenters or hairdressers.
Advantages of Sole
business is small, the money needed to set up the business is often
It is easy for the
owner to keep full control of the business.
It is easy to set
up as a sole trader, there are few formalities.
The owner is the
boss, so can make quick decisions without the need to speak to others
Profits do not
have to be shared with others.
Disadvantages of Sole
liability" - if the owner gets into debt they risk losing their
personal assets to pay bills.
If the owner is
ill or dies it is difficult for the business to continue to trade.
are long hours and few holidays.
Shortage of money
can make it difficult to expand.
This type of business is also easy to set up, however there are some
documents to obtain. The partners should write a "Deed of
Partnership" which sets out essential details. it will contain details
of the number of partners, the type of partnership, the amount of capital
given by each partner and how profits or losses are to be shared. If there
is no deed of partnership the partners will all receive an equal share if
the partnership ends. Partners may work in the business and be paid a salary
as well as a share of the profits, or they may only invest in the business,
and have no involvement in the day to day running of the business, this type
of partner is called a "Sleeping Partner." In a partnership there
should be between 2 and 20 partners.
divide control of the business and specialise in certain areas.
be shared, so allowing time off and more holidays.
easier than sole traders as there is more capital to invest.
The business can
continue if one partner leaves or dies (although the death of a
partner will end the partnership - a new partnership will need to be
set up for the business to continue.)
have unlimited liability.
arguments may take place between partners about the business.
There are two types of limited company, Private Limited Companies, known as
"Ltd" and Public Limited Companies, known as (PLC). Public Limited
Companies (PLC's) can sell shares to members of the public on the stock
exchange, unlike ordinary limited companies (Ltd) which can not.
Both PLC and Ltd
companies must use the abbreviations "PLC" and "Ltd" in
their name to show traders and customers that the liability is limited,
unlike partnerships or sole traders. Therefore traders or customers can not
recover debts from the personal funds of the company shareholders.
Features of Limited
Companies: Both types of limited companies can
be formed by a minimum of two shareholders, there is no maximum number of
shareholders. A limited company is a "Separate Legal Entity" from
a legal point of view, this means it can take legal action against others in
its own name, not the name of the shareholders. The business can continue if
one or more shareholders dies. Shareholders normally have little say in the
running of the business, it is normally the company directors who run the
business. Decisions are made by the Board of Directors. Private limited
companies must have their accounts available for inspection at any time.
A PLC has the same
advantages as Ltd's, such as greater chance of continuation when a
shareholder dies and separate legal identity. The main advantage of a PLC
over a Ltd is that it is able to raise capital from the public. The other
advantages and disadvantages of a PLC are:
Advantages of PLC's:
Benefit from bulk
buying (get things cheaper).
A PLC can borrow
money easier because of its large size.
A PLC can easily
specialise in various different areas.
Disadvantages of PLC's:
The business may
be too large, and be inefficient.
change quickly - takeover bids can be achieved by other companies
have to be open to public inspection.
want short term profits, whilst the directors want to invest profits
for long term growth.
Formation of a PLC
is complicated and expensive.
Setting up a Limited
Company: There are a number of steps to take in
order to set up a limited company. If a business wants to become a limited
company it must become registered with the "Registrar of
Companies". There are a number of documents that must be delivered to
the registrar, including:
Association: This document contain details of
the external relationship of the organisation, it will include the
The Name of the
business, to ensure that the name is different from any other
The main purpose
of the company (what it makes or sells).
The details of the
companies Registered Office.
Details about the
limited liability of the members.
Details about the
amount of capital invested.
The signature of
at least two of the shareholders.
Articles of Association:
This document lists the internal details for the company. It must be signed
by the same people who signed the Memorandum of Association. The following
details must be included:
How directors are
How meeting are to
be arranged and conducted.
How profits are
Other documents which
must be submitted include the "Statutory Declaration" which
declares that the requirements of law have been met. If the registrar is
happy that the documents have been submitted then they will issue a
"Certificate of Incorporation". The company is now a separate
legal entity. At this point a Ltd can begin to trade, but a PLC must arrange
its funding from the public first. It will issue a "Prospectus"
giving details about the company plans. Once funding is arranged the
registrar will issue a "trading Certificate" and the PLC can then
begin to trade.
Step 1 : Register with
Registrar of Companies, submit relevant documents.
Step 2: The business
will receive a "Certificate of Incorporation."
Step 2: Issue a
Step 3: Obtain Capital
through a "Share Issue".
Step 4: Receive a
Step 5: Begin Trading
as a PLC.
Other types of Business
Organisation: The main types of business
organisation are Sole Traders, Partnerships and Limited Companies, however
there are some other forms of business, such as Co-operatives and
The first type of co-operative is a "Worker Co-operative", this is
formed by workers buying out the company they work for, normally when the
business gets into financial difficulty. By co-operating the members can
share experience and skills and get a share of the profits. Worker
co-operatives normally elect managers and may employ external people such as
The second type of
co-operative is a "Retail Co-operative". This is where shops have
wider aims than to only make a profit. Anyone can join the co-operative by
buying shares from it - not from the stock exchange. The biggest retail
co=operative is the "Co-op" a chain of supermarkets in the UK.
There is one vote per member, regardless of the number of shares held.
Members share the profits. Retail co-operatives can benefit from bulk
This type of business was launched in the UK in 1977. Franchising involves a
company allowing someone else to use its logo and trade mark and sell its
products. The "Franchisees" are the people who pay for the use of
a companies products, the "Franchiser" will provide the products,
decorate the shop in the company style and provide the marketing for the
business. Popular businesses for franchising in the UK are fast food
restaurants, such as "KFC".