business setups (c) krystle attard 2013. the economy can be divided into two sectors: the private...
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(C) Krystle Attard 2013
EntrepreneurshipBusiness Setups
(C) Krystle Attard 2013
The economy can be divided into two sectors:
The Private Sector
The Public Sector
Emerging model: Private - Public Partnerships
Economic Sectors
(C) Krystle Attard 2013
Firms owned by private individuals Sole Traders Partnerships Private Limited Companies (Ltd) Public Limited Companies (PLC) Franchises Cooperatives
The Private Sector
(C) Krystle Attard 2013
Government Structure – Ministries, Government Departments, Local Authorities
Public Corporations – provide essential services for a decent lifestyle
QUANGOs – National Authorities, Regulatory Bodies (national level)
The Public Sector
(C) Krystle Attard 2013
Private – Public Partnership
An enterprise jointly owned by the Government and the private sector
Defined in terms of shares
Public Sector continued…
(C) Krystle Attard 2013
Limited liability – owners not personally obliged to make up for company debts if it goes bankrupt
Personal possessions may be reclaimed by creditors if they are not used for standard of living
Unlimited liability – owners may have to cover debts of a bankrupt business by selling personal possessions
Liability of companies
(C) Krystle Attard 2013
Limited Liability Companies (Ltd.)
Public Limited Companies (plc.)
Criteria set by local authority: MFSA
A minimum threshold of company assets
Plc. – sells shares to the public
Private Companies
(C) Krystle Attard 2013
Set up business under an established name
No marketing costs
License fee paid annually
Part of profits go to mother company
Outlets adhere to specific requirements
Franchises
(C) Krystle Attard 2013
Charity-based organizations - not for profit
Typically receive donations or funds from groups or government
Any financial surplus is ploughed back into the organization
Focus on providing a community service
Not For Profit Businesses
(C) Krystle Attard 2013
Managed and operated by one person
Tasks may be delegated to family members
No formal employees
Unlimited liability
Accountant draws up annual accounts
Sole Owner / Self Employed
(C) Krystle Attard 2013
2 – 20 partners
A combination of active and sleeping partners
1:1 ratio for sleeping/active partners
Unlimited liability
Bound by legal contract
Partnership
(C) Krystle Attard 2013
Private or Public Company
Group of Companies
Franchises
Limited Liability
Assets exceed an established threshold
Private companies
(C) Krystle Attard 2013
Both have limited liability
Private companies: ltd. denomination
Public companies: plc. denomination
plc. - offers shares to the general public
plc. – publishes accounts at least annually
Private and Public Companies
(C) Krystle Attard 2013
Limited liability companies owned by the same person(s)
Not always in the same industry
Corporate group – same industry
Conglomerate – different industries
Merger – companies taken over by others
Group of Companies
(C) Krystle Attard 2013
Premises hired out to an established company
Adheres to strict regulations
Rules vary from size of premises to pricing
Marketing costs provided by head office
Percentage of profit goes to mother company
Franchises
(C) Krystle Attard 2013
Sole owners join forces
Unified marketing campaigns
Similar to partnership setup
Pool resources for mutual benefit
Owners may also be employees
Cooperative
(C) Krystle Attard 2013
Usually defined in terms of number of employees
Small enterprises - up to 20 employees Medium enterprises - up to 500 employees
Different thresholds for defining enterprise size
Small Medium Enterprises (SMEs)