POA Notes Chapter 1-16

(Thesenotesconsist mainlyof thetheorypartsof thetextbook, refertoself notesandtextbookforpractical. Somechaptersareskipped) 1.1IntroductiontoBusinessTypesofBusinesses TradingBusiness ServiceBusiness Buysfromsuppliersandsellsgoodstocustomers Providesservicetocustomers E.g.Cafes,restaurants E.g.Salons,webdesign >FormsofBusinessOwnerships SoleProprietorship LimitedLiabilityPartnership PrivateLimitedCompany Ownedbyonepersonwhocontributescapital Ownedbytwoormorepartnerswhereeachpartnercontributescapital Ownedby50orlessshareholderswhereeachshareholderbuyssharesandcontributescapital BanksandotherlendersarelesslikelytolendmoneytoanSPduetolackof personal assetsthatcanserveascollaterals BanksandotherlendersaremorelikelytolendmoneytoLLPastherearesourcesofpersonal assetsfrompartnersandbusinessassetsthatserveascollaterals BanksandotherlendersaremorelikelytolendmoneytoPLCastherearebusinessassetsof highvaluethatcanserveascollaterals WhenSPincursdebt/loss,thesoleownerisexpectedtopayusinghis/herpersonalassets WhenLLPincursdebt/loss,partnersarenot personallyliableforthem.However,ifitisduetothewrongfulactionsof onepartner, onlythat personisresponsiblewhileotherpartnersarenotaffected. WhenPLCincursdebt/loss,shareholdersarenot obligedtopaythemusingpersonalassets,butmaynotreceivedividends.Atmost,theywillonlyforfeittheirinvestments. Ownerusuallyrunsthebusinessbythemselfandhasabsolutecontrol.Theymayhire Controloverthebusinessissharedamongpartnerswithat least onepartnerheavilyinvolved.Partnersmayhire Shareholdershavenocontroloverthebusiness(unlesstheyarepartofmanagementteam)Companyhiresprofessionals

professionalstohelpmanagethebusiness professionalstohelpthem. tomanagethebusinessonbehalf of theshareholders SPexistsaslongastheownerisaliveanddesirestocontinueoperation LLPexistsforeveruntilwounduporstruckoff Companyexistsforeveruntilwounduporstruckoff Ownercaneasilyupdateparticularsofthenewownertonotifythecorporateregulatoryauthorityoftransferofownership All partnersneedtoagreetoaddition/withdrawal ofpartnersbeforecorporateregulatoryauthoritywillacknowledgethetransferofownership Shareholderspayastampdutytothetaxauthoritytogivetheirsharestoanotherpersonororganisation Stampduty-taxrelatedtotransferofproperty,stocksandshares 1.2StakeholdersandtheirDecisionNeeds Stakeholders InteractionwithBusiness DecisiontoMake OwnersandShareholders Contributecapitaltobusinessandexpectprofitinreturn Whethertocontinuetoinvestorsellthebusinessdependingontherisksandreturnsrelatedtothebusiness Managers Workforbusinessanddevisestrategiestorunitefficiently Whethertoconsiderwaystoimprovethebusiness’performance Employees Workforbusinessandperformexecutiveduties Whethertocontinueworkingatthebusiness Lenders Makemoneyavailabletobusinessandexpecttobefullyrepaidwithinterest Whethertograntloanstothebusiness Suppliers Supplygoodsand/orservices Whethertoselltothebusinessoncredit Customers Buygoodsand/orservices Whethertobuyfromthebusiness Government Enforcetaxregulations Whetherbusinesscomplieswithtaxregul