{"id":113,"date":"2022-06-02T10:37:06","date_gmt":"2022-06-02T09:37:06","guid":{"rendered":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/?page_id=113"},"modified":"2024-05-30T11:36:32","modified_gmt":"2024-05-30T10:36:32","slug":"private-sector-organisation","status":"publish","type":"page","link":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/private-sector-organisation\/","title":{"rendered":"Private Sector Organisation"},"content":{"rendered":"<p>The organisations listed below operate in the private sector as they are owned and controlled by private individuals or groups of individuals.<\/p>\n<ul>\n<li>Sole Traders<\/li>\n<li>Partnerships<\/li>\n<li>Private Limited Companies<\/li>\n<\/ul>\n<h2><span style=\"color: #ff0000\">Sole Traders<\/span><\/h2>\n<ul>\n<li>Sole traders are owned by <strong>one person<\/strong>.<\/li>\n<li>The owner has <strong>control<\/strong> over all decisions made in the business.<\/li>\n<li>Start-up <strong>finance<\/strong> can come from\n<ul>\n<li>the owner\u2019s own <strong>savings<\/strong> which they invest in the business.<\/li>\n<li>Receive <strong>grants<\/strong> from the government<\/li>\n<li><strong>loans<\/strong> from the banks.<\/li>\n<li>Once the business is established the owner may <strong>reinvest profit<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><strong><span style=\"color: #ff0000\">Advantages<\/span><\/strong><\/h3>\n<ul>\n<li>No legal documents are required to setup.<\/li>\n<li>The owner has control over all decision<\/li>\n<li>As the owner makes all decisions, they can respond quickly to changing circumstances.<\/li>\n<li>The owner gets to keep all the profits.<\/li>\n<\/ul>\n<h3><strong><span style=\"color: #ff0000\">Disadvantages<\/span><\/strong><\/h3>\n<ul>\n<li>Can be hard for the owner to take time off.<\/li>\n<li>Can be hard to raise finance<\/li>\n<li>Unlimited liability \u2013 if the business goes into debt the owner is personally liable for all the debt and may have to sell personal possessions and use savings to pay off debt.<\/li>\n<\/ul>\n<h2><span style=\"color: #ff0000\">Partnerships<\/span><\/h2>\n<ul>\n<li>Partnerships are <strong>owned by 2-20 people<\/strong><\/li>\n<li>Partners <strong>share control<\/strong> of the business &#8211; details of how much control each partner has may be outlined in a <strong>Deed of Partnership<\/strong>.<\/li>\n<li>Finance to start up a partnership may come from\n<ul>\n<li>partners\u2019 own investment<\/li>\n<li>\u00a0grants<\/li>\n<li>\u00a0loans<\/li>\n<li>reinvested profits.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><a href=\"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/public\/n5businessmanagement\/uploads\/sites\/10132\/2022\/06\/02104900\/Screenshot-2022-06-02-104813.png\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-117 aligncenter\" src=\"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/public\/n5businessmanagement\/uploads\/sites\/10132\/2022\/06\/02104900\/Screenshot-2022-06-02-104813.png\" alt=\"\" width=\"339\" height=\"143\" srcset=\"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/public\/n5businessmanagement\/uploads\/sites\/10132\/2022\/06\/02104900\/Screenshot-2022-06-02-104813.png 642w, https:\/\/blogs.glowscotland.org.uk\/glowblogs\/public\/n5businessmanagement\/uploads\/sites\/10132\/2022\/06\/02104900\/Screenshot-2022-06-02-104813-300x127.png 300w, https:\/\/blogs.glowscotland.org.uk\/glowblogs\/public\/n5businessmanagement\/uploads\/sites\/10132\/2022\/06\/02104900\/Screenshot-2022-06-02-104813-624x263.png 624w\" sizes=\"auto, (max-width: 339px) 100vw, 339px\" \/><\/a><\/p>\n<h3><strong><span style=\"color: #ff0000\">Advantages<\/span><\/strong><\/h3>\n<ul>\n<li>Partners may specialise in areas of the business<\/li>\n<li>Partners can raise more start-up finance between them.<\/li>\n<li>Partners can share ideas and responsibilities<\/li>\n<li>Cover for each other if someone is unwell or on holiday.<\/li>\n<li>Partnerships are still relatively simple to set up in terms of legal documents.<\/li>\n<\/ul>\n<h3><strong><span style=\"color: #ff0000\">Disadvantages<\/span><\/strong><\/h3>\n<ul>\n<li>Profits will be shared out between partners.<\/li>\n<li>They have <strong>unlimited liability<\/strong> for debts of the business so risk losing everything they own.<\/li>\n<li>Partners may disagree on how the run the business so there may be conflict in the direction.<\/li>\n<li>If a partner dies or wants to leave, the partnership cannot continue trading and must be dissolved and re-formed with new partners.<\/li>\n<\/ul>\n<h2><span style=\"color: #ff0000\">Private Limited Companies<\/span><\/h2>\n<ul>\n<li>Limited liability companies are <strong>owned<\/strong> by <strong>shareholders<\/strong><\/li>\n<li>In a <strong>private limited<\/strong> company shares can only be sold to people whom existing shareholders agree upon.<\/li>\n<li>\u2018The business has <strong>limited liability<\/strong>. Each shareholder can only lose the finance they invested<\/li>\n<li>Day to day control is in the hands of the <strong>Board of Directors<\/strong><\/li>\n<li>To set up a private limited company <strong>Articles of Association<\/strong> and a <strong>Memorandum of Association<\/strong> must be prepared.<\/li>\n<li>Finance to start a private limited company comes from\n<ul>\n<li>sale of shares<\/li>\n<li>grants<\/li>\n<li>loans<\/li>\n<li>reinvested profits<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><strong><span style=\"color: #ff0000\">Advantages<\/span><\/strong><\/h3>\n<ul>\n<li>Shareholders have limited liability and so cannot lose more than their original investment.<\/li>\n<li>Private limited companies can control who buys their shares, so they are not vulnerable to be taken over against their will.<\/li>\n<li>The business can sell shares to up to 50 people to raise finance for major projects.<\/li>\n<\/ul>\n<h3><strong><span style=\"color: #ff0000\">Disadvantages<\/span><\/strong><\/h3>\n<ul>\n<li>Companies must be registered with the Registrar of Companies and submit financial statements.<\/li>\n<li>It is costly to establish a limited company &#8211; lawyers and accountants need to get involved.<\/li>\n<li>It may be difficult to get existing shareholders to agree who to sell share to.<\/li>\n<li>The greater the number of shareholders, a smaller the share of profit a shareholder receives.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The organisations listed below operate in the private sector as they are owned and controlled by private individuals or groups of individuals. Sole Traders Partnerships Private Limited Companies Sole Traders Sole traders are owned by one person. The owner has control over all decisions made in the business. Start-up finance can come from the owner\u2019s [&hellip;]<\/p>\n","protected":false},"author":79984,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-113","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/pages\/113","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/users\/79984"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/comments?post=113"}],"version-history":[{"count":13,"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/pages\/113\/revisions"}],"predecessor-version":[{"id":534,"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/pages\/113\/revisions\/534"}],"wp:attachment":[{"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/media?parent=113"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}