Barry & Doug’s
Barry and Doug are two men in their mid-thirties who are dissatisfied with their current employment. They have decided to co-operate and establish a small garden maintenance business in the community suburb of burgeoning. A partnership and private company have both been highly recommended, they have been shown the disadvantages and the swat analysis of their company.
This report is made to show the options and to choose the most appropriate structure that Doug and Barry are being confronted with before they prepare their business. The two choices that they have been confronted with are a Private company and a partnership; a franchise has been discussed but has been rejected. This report will show the statistics between the two different company structures and what could help the business become a success. Sources used vary between sources from the media, primary sources from government organisations and various websites including articles. The government sources were the most reliable information and were the only information used as the other sources were not practical or considerable for this report.
Partnerships are a quick, basic and simple way to establish a business where two or more people operate. You do not necessarily need experience in the field nor have the money behind you if your partner is willing to cooperate with you. Many different partnerships accommodate individuals who have different ideas or ways on how to create a service or business. When partners choose the partnership structure they do not have legal obligation to write a contract, but it is advisable. People write up contracts so they do not violate each overs privacy and friendship running the business with conflict within the business. Partnerships include splitting the profit and decision making, but also involve a sharing of the risk. In a partnership the business can only come under one name in one location. The costs for a partnership are minimal with many tax deductions, purchasing business name and to organise tax.
A private company is known as an, ‘artificial person.’ A company can sue and also be sued which could be harmful and a positive as well. The owners/establishers or president/CEO do not own the company completely. The company is run by the shares which lead into a full percentage with a max of 50 shareholders. The shareholders are not random people in the community but private people who are picked by the leading shareholder or owner of the company. Everyone has a say in the company that owns a large amount of shares. A private company is owned by the shareholders so that means the liability is also scattered among as well but only for the amount in the shares they bought. Private companies do not need to keep to one location; it can have more than one main site in different locations. There are many different large costs that apply to starting a company such as the name and taxes on the company before you start up.
Partnership Private Company Advantages | Disadvantages | Advantages | Disadvantages | Shared Responsibility between the partners. | Unlimited liability. Debt on all kinds. | Limited reliability with the shareholders trait. | Expensive to start up and running | Partner skills combined. | No contract could cause a broken company between rivals. | Can sue others. | Can be sued. | Authority and control to do what you want (Make your own decisions.) | Can only stay in one location on one branch. | Money doesn’t necessarily need to accumulate out of establishers pockets. | Own more than one store and have a range of locations. |