Liability is the weaknesses of the proprietorship .The business owner will be held directly responsible for any losses, debts, or violations coming from the business. For example, if an enterprise has to repay its debt, it will be satisfied from the owner's own personal fund. This is drastically different from corporations, wherein the members enjoy limited liability (i.e., they cannot be held liable for losses or violations). Another weakness of the proprietorship is taxes. Although the sole proprietorship enterprise has many tax advantages, the main drawback is that the owner must pay individual income tax.
By understanding the business environment the organization can identify its strength, weaknesses, opportunities and threats. Organizations are categorized into two types and those two are private sector and public sector. Organizations in the private sector are sole trader ship, partnership joint ventures, clubs and societies, limited companies, co-operatives and the public sector consist of government companies, government departments and government corporations. Organizations in private sector are owned by the private individuals for profit motive whereas organizations in public sectors are mostly owned by the government. Stakeholders are people with common interest in business and the stakeholders of FCUK which has sorted into two groups internal and external stakeholders and stakeholders in both groups has their responsibilities towards FCUK.
The establishment of partnership can also be easily formed, managed and the start-up costs are relatively low. It has a flexible management system as long as all partners agree to the decisions made. Accounts does not need to be audited and annual returns need not be filed with ARCA. (4) Furthermore, it is regulated less strictly as compared to a company whereby it has to adhere to the Companies Act. All partners can choose to participate in managing the company.
LLC Pros: Presents the opportunity for an individual to be taxed as a sole proprietor, partnerships, along with S and C Corporation. This type of business entity also has less paperwork along with filing costs. The members are exempt from any liabilities or legal issues the company may experience. The most beneficial may be that owners’ responsibility for any debt is limited despite having control the company Cons: Typically corporations are more expensive to startup compared to sole proprietorship or partnerships. At times an LLC business may find when starting up this type of business their budget is tight leaving them not able to pay themselves wages.
EXECUTIVE COMPENSATION Executive compensation is a broad term which comprises of financial compensation and non-financial rewards given to an executive from their firm for their services. This package is decided by a company’s Board of Directors (consisting of independent directors). It should be designed in a manner which incentivizes the executives and motivates them to perform in accordance with the company’s goals and its long term growth. These packages generally include a mix of short-term incentives (including salary, annual bonus, benefits, and perquisites) and long-term incentives (including stock options and restricted shares). E.g.
Indeed the prize receives only a limited number of people. The rest worked for nothing. In this regard, there is an opinion that professionals do not look in the direction of crowdsourcing, as they value their time to spend it for nothing. • Also crowdsourcing is not always the cheapest way. For example, the creation of a logo or design is often cheaper to buy by a cheap designer.
Outsourcing, according to the dictionary definition, is ‘the contracting or subcontracting of noncore activities to free up cash, personnel, time, and facilities for activities in which a company holds competitive advantage. Companies having strengths in other areas may contract out […] aspects of their businesses to concentrate on what they do best and thus reduce average unit cost’. (Businessdictionary.com) In other words, it is just a strategy of transferring particular business functions or tasks to outside suppliers instead of completing them internally. In today’s business world, this practice is widely used by considerable number of companies, especially those operating on the global level – outsourcing enables firms to focus on their main long-term goals by relieving them from marginal activities that are being entrusted to external organization. Still, outsourcing is not purely riskless and there is always a certain degree of hazard that the company
Sole proprietorship also experience very little government control and few restriction and are taxed differently then many businesses. One of the best things about opening a sole proprietorship business though is the speed and ease at which the business can be started (“The Pros and Cons of a Sole Proprietorship”, n.d.). There are of course problems with having a sole proprietorship business. Owners are 100% responsible
This budget is mainly used in large corporations such as B.A to keep all the employees and managers united. Operating budget is also another type of budget and this is breakdown of anticipated income and costs over a long time of period. This type of budget combines with accounts such as sales, production, costs for material; labour and industrial costs and management expenditures. This type of budget is formed on a different basis such as weekly, monthly and yearly and businesses compare these financial reports over a selected time to see whether the business is overspending or saving on their
Whereas in general partnership the partners share the profit as well as the losses of the partnership b) Flexibility: LLP enjoy flexibility in maintaining its internal structure. Each can decide upon what amount of contribution they prefer to invest in the LLP. Partners can decide the terms and conditions to run the business. An LLP agreement is more flexible than a Company
Other than physical intervention via helping end labor union strikes, the government also affected businesses and the economy through law. When laws were passed in an attempt to manage the large corporations that controlled entire industries, said laws were often spun in favor of the businesses instead. One example was the Sherman Antitrust Act. Intended to control and regulate trusts, trusts being deals made between two parties that allowed benefactors to gain large sums of money, the Sherman Antitrust Act was instead interpreted in law to control labor unions. The logic used was “that the labor unions were a trust of labor” (Laissez).
Altering Financial Statements Major companies with extensive operations such as Chesapeake Energy have several areas in which their financial statements can be altered intentionally. This can be due to issues such as motivation of employees, opportunities that may arise, and rationalizations individuals make for such actions. One area in which individuals may alter such financial information relates to understating expenses to boost profits. There are several reasons to commit such fraud and report overstated profits. Staff members may be under pressure by higher level management by standards set in the beginning of the year, in addition, bonuses and compensation packages may solely depend on profits for the year.