Organisation of the
company

Under this item in the business plan you describe how you organise the
daily work in your new business. Which kind of legal structure do you
chose, how to manage your finances, business- and staff policies etc.

Legal structure of company
Countries choose different ways of organising the legal structure of the
business life. Therefor you have to contact your local authority in order to
find out how your country organise the business society.

Throughout most parts of world, three predominant main types of legal
forms are used to run small business organisations. These forms are as
follows :

• Sole proprietorship - where generally only one person funds the
business activities
• Partnerships - where two or more people band together to finance or
run a venture
• Corporations/limited companies - where it is possible for only a few
friends /family members up to many thousands to subscribe for a share
in business ownership

Sole proprietorship
The vast majority of new businesses are set up as sole proprietors. The
form is normally formality-free; there are no rules about the records you
have to keep. Nor is there a requirement for your accounts to be audited, or
for financial information on your business to be filed at the registrar of
companies. You still have to pay tax from the profit.

The biggest disadvantage of being a sole trader is that your are totally
responsible for any debts your business incurs. If you go bankrupt, your
creditors are entitled to size and sell your possessions-personal as well as
business.

Partnerships
Partnerships are effectively collections of sole proprietors and, thus, there
are legal issues related to personal liability. There are very few restrictions
to setting up a business with another person (or persons) in partnership,
and several definite advantages. By pooling resources you may have more
capital. You will be bringing, several sets of skills to the business. If you get
ill the business can still carry on.

The biggest disadvantage is if your partner makes a business mistake.
Perhaps by signing a disastrous contract, without your knowledge or

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