Studio Brief 3//Life's a Pitch

Types of Businesses

Before choosing what kind of business we want to be it is important to understand what are the pros and cons of each one. As we are a small company of individuals designers, it could jeopardise everyones position and relationship with one another if we pick the wrong one.  

Partnerships

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.

A partnership must file an annual information return to report the income, deductions, gains, losses, etc., from its operations, but it does not pay income tax. Instead, it "passes through" any profits or losses to its partners. Each partner includes his or her share of the partnership's income or loss on his or her tax return.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Partnerships

In a partnership, the partners provide the capital and share the responsibility of running the business on agreement between its members. 

Partnerships are common in the same services provided by sole traders but a partnership would have the advantage of being able to raise more money because each partner could make a financial contribution. The liability for any debts of the business would be the partners.

Partnerships in e-conomic

In the e-conomic Online Accounting system default account setups exist for various types of companies including Partnerships with and without VAT. Hereby the chart of accounts and other system features are automatically set up for you ready to be tailored to your needs. http://www.e-conomic.co.uk/accountingsystem/glossary/partnerships Limited A limited company is registered at Companies House. It must operate within the Companies Act 2006and is governed by its own articles of association (companies registered before 1.10.2009 may have both a memorandum of association and articles of association). There are different types of limited company but they all have these qualities. Once registered a company has corporate personality. It is a legal entity (or legal person) with its own legal rights and obligations, separate and distinct from those of its members. The company's property is its own and is not treated as belonging to the company's shareholders and directors. The company itself can enter into contracts, employ people, sue and be sued and can be liable if it commits criminal offences. This has many practical implications. Every company has a constitution in the form of articles (or, for older companies) memorandum and articles. A company must have both directors and members. (Members are shareholders unless thecompany is limited by guarantee). The key feature of a limited company is that it offers limited liability to its members. The company (as a separate legal entity) is liable for its debts and the members and directors are not personally liable (unless they have acted wrongly in some way). The members' liability is limited to paying to the company the amount they have agreed to pay for their shares. This may be a purely nominal amount, for example if the shareholders have each taken one £1 share. Most companies limited by shares are trading companies, but there are many different types of registered companies and they are used for many different purposes, some of which have nothing to do with running a business. http://www.companylawclub.co.uk/topics/what_is_a_limited_company.shtml Corporative Co-operative businesses are owned and run by and for their members, whether they are customers, employees or residents. As well as giving members an equal say and share of the profits, co-operatives act together to build a better world. Co-operatives are a flexible business model. They can be set up in different ways, using different legal structures, depending on what works for the members. The definition of a co-operative business is that they are owned and run by the members - the people who benefit from the co-operative's services. Although they carry out all kinds of business, all co-operative businesses have core things in common. Co-operatives want to trade successfully – they are businesses, not charities, after all.Co-operatives share their profits Members, such as farmers or freelancers, tenants or taxi drivers, can often do better by working together. And sharing the profit is a way to keep it fair and make it worthwhile. Rather than rewarding outside investors, a co-operative shares its profits amongst the members. Co-operatives are owned by people like you Co-operatives are a business model that exists to serve its members, whether they are the customers, the employees, or the local community. The members are the owners, with an equal say in what the co-operative does. As well as getting the products and services they need, members help shape the decisions their co-operative makes. Across the UK, co-operatives are owned by 13.5 million people – and these numbers keep on growing. Co-operatives are a success around the world This mix of self-help and mutual aid has made co-operative business an international force for good. 100 million people around the world are employed by co-operatives, whilst nearly 1 billion are members. http://www.uk.coop/what-co-operative