Business Organisations. Unit 6 – Domestic Environment. Class Exercise. Describe the different types of business organisations that exist. What are the advantages and disadvantages that exist for each type of organisation?. Objectives of this topic. To have an understanding of the following
Unit 6 – Domestic Environment
Unlimited liability – can lose all assets
Lack of capital for expansion
Lack of continuity of existence
Difficulty of raising finance
One person responsible for all tasks.
A lot of pressure and work for one person.
Partners have unlimited liability
Disagreement among partners
Profit shared among partners
Decision-making is slow
To form a private limited company, the following steps must be taken:
High formation expenses.
Accounts must be audited and published.
Many legal requirements to be followed.
Owners may have little say in the running of the company.
Lack of loyalty.
They provide intense competition for local firms.
Most of the profits are repatriated to their head office.
Larger transnationals exert massive pressure on governments for their own objectives.