Forms of business organisation

1.      Limited liability: The liability of the owners for the debts of the business is limited to the owners’ investment.

Example: Shareholders in all companies have limited liability.

2.      Articles of Association: A legal document that must be completed before a business is given company status. It provides details of the internal rules of the company.

Example: The issuing of shares and the rights and duties of directors.

3.      Memorandum of Association: A legal document that must be completed before a business is given company status. It provides important information for shareholders.

Example: The name, address, registered office and issued capital of the business. The objectives of the business are also stated.

4.      Annual General Meeting (AGM): Companies must hold these each year.

Example: All shareholders have the right to attend and vote on which directors should run the company.

5.      Co-operative: An organisation runs by a group of people, each of whom has a financial interest in its success and a say in how it is managed.

6.      Franchise: A business that uses the name, promotional logos and trading methods of an existing successful business.