Setting up a business

There are many types of business entity defined in the legal systems of various countries. These include partnerships, sole traders, and limited companies.

Many large business in the UK are Public Limited Company.

Public Limited Company

A company whose securities are traded on a stock exchange and can be bought and sold by anyone. Public companies are strictly regulated, and are required by law to publish their complete and true financial position so that investors can determine the true worth of its stock (shares).

Public limited company and its abbreviation Plc are commonly used in the UK in the way that corporation and Inc. is used in the United States.

Sole trader or sole proprietor

A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts.

Partnership

A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.

Private Limited Company

A type of company that offers limited liability to its shareholders but that places certain restrictions on its ownership.

If you want to set up a business, you will have to write a business plan.

Business plans begin with a summary, often called an Executive Summary, which explains in one or two pages:

• What sort of company it is

• What the product or service is, ad what is special about it

• Who the managers are

• How much money you need, and what you will use it for

Corporate Alliances and Acquisitions

As business become increasingly competitive, many companies have to strengthen their operations to remain profitable. There are several ways to achieve it.

Joint venture

A joint venture is a strategic alliance where two or more people or companies agree to contribute goods, services and/or capital to a common commercial enterprise. This type of deal allows the partners to combine their strengths in one specific area.

Merger

A merger occurs when one firm assumes all the assets and all the liabilities of another. The acquiring firm retains its identity, while the acquired firm ceases to exist. A majority vote of shareholders is generally required to approve a merger.

Companies merge for many reasons, for example, to increase market share and cut costs in certain areas, such as research and development.

Acquisition

An acquisition is the purchase of one business or company by another company or other business entity. Consolidation occurs when two companies combine together to form a new enterprise altogether, and neither of the previous companies survives independently. Acquisitions are divided into "private" and "public" acquisitions. An additional dimension or categorization consists of whether an acquisition is friendly or hostile.