LCC20177853 Organizations Assignment Help

P1. Explain different types of organizations; public, private and voluntary sectors and legal structures
Organizations
Are arrangement of recognised structure of relationship and responsibilities such as
hierarchy’s and also authorities. These are an individual alone or groups of individuals
working together to accomplish one or more objectives and goals which is the
business’s mission in the short and long-term. These goals could either be to gain
profit, or can be a non-profit organisation such as Muslim Aid or British heart
foundation. Although organisations have been well-defined differently by different
philosophers, almost all characterisations mention five common structures.

 They are made of collective individuals and groups.

 They are motivated in achieving the same goals and aims.
 They involve different types of functions and purposes
 The functions need to be organised to ensure the business is successful.
 They exist independently (Open learn, 2017)
They are all oriented towards achieving collective goals. Below is a diagram of different organizations.
Source 1: (smart Art Graphic), Author Mariyam bib lyquat
Sole trader:
It is a very common method of business ownership which is an individual who is their
own boss and starts up their business alone. However, they may make decisions to
employ people, but they are the only holder of the business. The purpose of this business
ownership is to provide an excellent customer service to consumers who purchase the
services or goods from a sole trader, thus in doing so all profits go to the sole trader
alone.
Example, of these sole traders are a Newsagent’s shop or a hair dresser, which are
relatively small and employ 1 to 3 employees. (BBC, 2017).

Advantages of Sole trader:

 The owner maintains complete control of their business and can decide how it is ran without the
disturbance of others making choices for you.
 The wage bill will be very low due to the fact that a sole trader may only employ one or two people.
 The owner who is running the business holds all the profits within the business.
Disadvantages of a Sole trader:
 Unlimited liability
 A sole trader is that if they make decisions alone, the decisions they make will result on the potential
success or failure of the business. (BBC, 2017)
As a sole trader you will be solely responsible for the debts of your business and this is
something that requires serious consideration on your behalf as failure could leave you
saddled with the debts of the business, even after you cease trading. (Terry Gorry,
2013)

Terry Gorry Terry Gorry Terry Gorry Terry Gorry

A Partnership:
Partnership is a business ownership is an ownership made of two or more people with the
same business idea. Typically, a contract of a partnership is assigned between the two or
more people which is called a deed of partnership. In the deed of partnership, the
document states the agreement between the partners of the rights of each partner, and
specifies how much money has been invested from each party also how much the
profits and losses would be divided between the partners. They are two forms of
partnerships, a general partnership which is both partners who similar portions of work,
and all partners are involved in the business. Another partnership is a sleeping partner
who invests their capital in the business, but doesn’t have to deal with the day to day
running of the business. The usual examples of these professionals that may decide to go
into a partnership together are solicitors or a dentist. (BBC,2017)
Advantages of a Partnership:
 Partners have each other to discuss about the business.
 Potential investors who contribute to the capital, resulting on maximum sales and profits.
 Shares responsibilities and new expertise
Disadvantages of a Partnership:
 Growth is limited
 A disadvantage of a partnership is that, like a sole trader they also have unlimited liability, so they are
responsible for their debts via personal assets
 Partnerships can cause arguments over decisions which can affect the business. (BBC, 2017)
A partnership is when 2 or more people operate a business as co-owners and have a
share income they also have an agreement or a contract, (Deed of partnership) this is
the terms and conditions agreed between the partners of the business agreement
between each other who want to run a joint business. A partnership agreement is
legally binding on all members (partners) a partnership, without an agreement can be
jeopardized if something happens to one or more of the partners.

Public Sector Private Sector Voluntary Sec

Source 2: (Thames water logo, 2008), (Microsoft logo, 2016), (Muslim aid, 2001)
Author Mariyam bib lyquat
Public Limited Company is generally a large, populated and known business organisation.
These business organisations are manufactures or retailers with stores in most of the city
centres in countries. They also have directors and shareholders. Unlike private limited
company’s public limited companies can trade shares in the stock exchange, which is
open to the general public. Private limited company and public limited company would
also need to ensure they have all four documents to run their organisations; (BBC,2017)
 Register with Companies House
 Issued with a Certificate of Incorporation
 Memorandum of Association
 Articles of Association
Private Limited: A small business such as New Look or River Island which is recognised to
the market as retailers that do not trade shares in the stock exchange and cannot be
sold to the general public are better known to be called a private limited company. They
must have at least one director to run the company, additionally the following business
ownership of a limited company is usually divided into identical parts called shares, those
who own one or more of the organisations shares are called a shareholder.
Advantages of a Private Limited Company:
 Companies have their individual legal identity, thus in doing so unlike sole traders aren’t liable for the
firm’s debt which is called Limited Liability
 Sell shares to investors raising capital to have a more chance of being successful.
Disadvantages of a Private Limited Company:
 Yearly audited returns to register company so it’s in the eye of the public inspection
 Not cheap to set up and also time consuming, legal fees also involved which makes it furthermore
expensive.
  There is the risk of uncontrolled growth which leads to management issues. With the business growing so
fast, managers might struggle to keep up with the increased ownership and finances involved in the
business. (Lilley, I. 2015).
Public sector: Is owned and ran by the state of the government for the people within the
country. The money for the public sector is generated from the people who are in
employment who pay taxes to the government, the money is then used to finance most
the public sector. Public sector organisations that are financed by the government Such
as the NHS or the H&M revenue. Examples of the public sectors are schools, the police,
parks and health services. A public-sector aim is to provide essential public services to
the country and communities. (Surbhi, 2015)
Advantages of Public Sector:
 Limited liability for shareholders also shareholders can buy, sell or transfer their shares without
agreements and permissions.
 Beneficial for the community as the earnings are funded by taxpayers, so everything is to give back to the
community.
 Security and stability over long term futures within the job placement, only way to be removed is
dependent on the employee’s performance,
Disadvantages of Public Sector:
 Very control and regulated base of operations, which include shareholders entitlement to all data,
 The co-founders may lose control over the business organisation and the rise of uncontrolled growth.
(Davies, B. 2013).
Private sector:
A Private sector are business that are owned and run by private individuals such as sole
traders, partnerships, private companies and franchises. The main aim is to provide
goods and services for the consumers, to gain maximum profits and lastly to grow and
develop. Private sectors usually gain their finance from personal savings, bank loans or
government grants. (Surbhi, 2015)

Advantages of Private Sector:

 More capital can be raised as they are infinite number of shareholders which shares can be traded
 It’s easier to raise finances because they have a variety of resources available
 It has a huge scale of mass production
Disadvantages of Private Sector:
 Has legal requirements which adds cost and also is time consuming
 Shares cannot be advertised or listed on a stock exchange
 Less job security
Cooperative:
Cooperative is a Firm owned controlled, and which is operated by a group of users for
their own benefit. Each member contributes equity capital, and shares in the control of the
firm on the basis of one-member, one-vote principle (and not in proportion to his or her
equity contribution).
Advantages of Cooperative:
 Is own and controlled by members so its easy formation
 Has a democratic control, one member, one vote
 A cooperative organization is owned and controlled by members.
Disadvantages of cooperative:
 It requires members to participate for success
 Has less incentive, there is a possibility of development of conflict between members.
 Limited capital
Voluntary sector: Voluntary sector isn’t owned by a group of people however someone is
responsible for ensuring that it sets targets and aims, thus ensuring it does what it is
set up to do. The purpose is to help particular types of people, for example Oxfam and
homeless shelters. The voluntary sector is funded by the public donations, local
authorities or the national lottery whom are also involved hugely. (Surbhi, 2015)
Advantages of Voluntary Sector:
 Work closely with the local communities to solve problems in need.
 They often give fast effective aid at times of crisis.
 Great for growth in job opportunities, showing that you’re willing to work for free to gain experience is
great for a CV
Disadvantages of Voluntary Sector:
 Working at a nonprofit can be fulfilling and maddening all at the same time. The industry has its own
way of doing things and insiders know how to navigate the negatives. Here are some of the most common
complaints of “non-profiteers.” (Case Foundation, 2011.)
 Risks are higher, a depraved day in a business job is likely to reflect on a bad day in a non-profit job, as it
can relate to a personal matter.
Refences:
BBC, (2017). Business Studies. [online]. Available
at: http://www.bbc.co.uk/schools/gcsebitesize/business/aims/limitedcompaniesrev1.shtml [Accessed 25
Sep. 2017].
Case Foundation. (2011). The Pros and Cons of Working in the Non-profit Sector – Case
Foundation. [Online] Available at: https://casefoundation.org/blog/pros-and-cons-working-nonprofit-
sector/. [Accessed 25 Sep. 2017].
Davies, B. (2013). Benefits of Working in The Public Sector – Careers Advice – jobs.ac.uk.
[online] Jobs.ac.uk. Available at: http://www.jobs.ac.uk/careers-advice/working-in-
industry/2104/benefits-of-working-in-the-public-sector. [Accessed 25 Sep. 2017].
Gov.uk. (2017). Set up a private limited company: Memorandum and articles of association – GOV.UK.
[online] Available at: https://www.gov.uk/limited-company-formation/memorandum-and-articles-of-
association. [Accessed 25 Sep. 2017].
Lilley, I. (2015). Advantages and Disadvantages of Private Limited Companies (LTD). [online]
Available
at https://getrevising.co.uk/grids/advantages_and_disadvantages_of_private_limited [Accessed 25 Sep.
2017].
Open Learn. (2017). Organizations and management accounting. [online] Available
at: http://www.open.edu/openlearn/money-management/organisations-and-management-accounting/content-
section-1. [Accessed 25 Sep. 2017].
Smith, J. (2015). Company Formation. [Blog] What is a company certificate of incorporation.
Available at: https://www.yourcompanyformations.co.uk/blog/certificate-of-incorporation-guide/.
[Accessed 25 Sep. 2017].
Surbhi, (2015) Difference Between Public Sector and Private Sector (with Comparison Chart) – Key
Differences. [online] Key Differences. Available at: http://keydifferences.com/difference-between-
public-sector-and-private-sector.html. [Accessed 25 Sep. 2017].
Gorry, T. (2013). sole trader | Small Business Law Ireland. [online]
Smallbusinesslawireland.com. Available at:
https://smallbusinesslawireland.com/tag/sole-trader/ [Accessed 17 Oct. 2017].
Duckett, C. (2012). Microsoft launches new company logo. [online] TechRepublic. Available at:
http://www.techrepublic.com/blog/australian-technology/microsoft-launches-new-
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Heliguy.com. (2016). INTERVIEW: Thames Water on Drones, Health & Safety, and Their £4bn Tunnel |
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aid, m. (2001). muslim aid logo 2001 – Google Search. [online] Google.co.uk. Available at:
https://www.google.co.uk/search?q=muslim+aid+logo+2001&tbm=isch&source=iu&pf
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