11

INTRODUCTION TO BUSINESS INTRODUCTION TO BUSINESS PROCESSES FOR WEB PROCESSES FOR WEB

DEVELOPERSDEVELOPERS

22

33

So far……….So far……….

• OrganisationsOrganisations

• Commercial OrganisationsCommercial Organisations– Sole TraderSole Trader– PartnershipPartnership– Limited CompanyLimited Company

• IncorporationIncorporation– Independent BodyIndependent Body

44

Organisational StructuresOrganisational Structures

• Share CapitalShare Capital

• Company ConstitutionCompany Constitution

• Directors responsibilitiesDirectors responsibilities

55

Share capitalShare capital

• Shareholders (Subscribers) own Shareholders (Subscribers) own CompanyCompany

• At start of CompanyAt start of Company– Authorised share capitalAuthorised share capital

•Number & Nominal (par) ValueNumber & Nominal (par) Value

•Say 100 shares @ £1 Say 100 shares @ £1

• Shareholders risk is share valueShareholders risk is share value– Partly PaidPartly Paid– PremiumPremium

66

SharesShares

• On being Wound UpOn being Wound Up– All debts must be paid before All debts must be paid before

shareholdersshareholders– All assets soldAll assets sold– If remainder then divided equally If remainder then divided equally

between shareholdersbetween shareholders– If debts > assets Shareholder lose If debts > assets Shareholder lose

moneymoney

77

BureaucracyBureaucracy• Large Companies (PLCs)Large Companies (PLCs)

– Regulated by Companies Act and Regulated by Companies Act and Stock ExchangeStock Exchange

• Small & Medium CompaniesSmall & Medium Companies– Regulated by Companies ActRegulated by Companies Act

Small Small CompanyCompany

Medium Sized Medium Sized CompanyCompany

TurnoverTurnover <=£2,000,00<=£2,000,0000

<=£8,000,00<=£8,000,0000

Balance SheetBalance Sheet <=£975,000<=£975,000 <=£3,000,00<=£3,000,0000

Average Average EmployeesEmployees

<=50<=50 <=250<=250

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Company ConstitutionCompany Constitution

• Memorandum of AssociationMemorandum of Association– Controls External RelationsControls External Relations

• Articles of AssociationArticles of Association– Control Internal RelationsControl Internal Relations

• (Shareholders Agreement)(Shareholders Agreement)

99

Memorandum of AssociationMemorandum of Association• Company NameCompany Name

– RestrictionsRestrictions

• Country of RegistrationCountry of Registration– England & Wales, Wales, ScotlandEngland & Wales, Wales, Scotland

• Objects of CompanyObjects of Company– Companies Act 1989 allow general commercial companyCompanies Act 1989 allow general commercial company

• A Liability ClauseA Liability Clause– Liability of members is limitedLiability of members is limited

• Authorised Share valueAuthorised Share value– Nominal Share Value and NumberNominal Share Value and Number

1010

Articles of AssociationArticles of Association

• Use Table A if required (Companies Act Use Table A if required (Companies Act 1948)1948)

• Rules of Share capitalRules of Share capital

• Transfer of SharesTransfer of Shares

• Meetings of MembersMeetings of Members

• Rules Governing Directors’ AppointmentsRules Governing Directors’ Appointments

• Power of DirectorsPower of Directors

• Dividends and ReservesDividends and Reserves

1111

Shareholders AgreementsShareholders Agreements

• Protect interests of minor shareholdersProtect interests of minor shareholders

• Article of AssociationArticle of Association– Changed at General MeetingChanged at General Meeting– Needs 75% majorityNeeds 75% majority

• Agreement Between ShareholdersAgreement Between Shareholders– All must signAll must sign– Can govern way voting is doneCan govern way voting is done

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Directors & Company Directors & Company SecretarySecretary• Directors Elected by ShareholdersDirectors Elected by Shareholders

– Act In best Interest of CompanyAct In best Interest of Company– HonestHonest– Declare InterestsDeclare Interests– Aware of Company’s Trading PositionAware of Company’s Trading Position– Exexutive & Non-Executive DirectorsExexutive & Non-Executive Directors

• Company SecretaryCompany Secretary– Statutory Returns to Companies HouseStatutory Returns to Companies House– Could be DirectorCould be Director

1313

Next LecturesNext Lectures

• Prices and CostsPrices and Costs

• Company FinancesCompany Finances

• Sales & MarketingSales & Marketing

• Business Plan (Assignment)Business Plan (Assignment)