Ch15 Article
http://news.bbc.co.uk/1/hi/business/4119240.stm
Summary
The article talks about different status when starting a new business. There are four kinds of legal status: sole trader, partnership, private limited company, and community interest company(CIC). It says when deciding which of these status will best fit the business, the owner should consider about a few things: tax, administration, the image of the business, legal requirements, and financial issues. In the article, it only explains how sole trader and private limited company work. As a sole trader, the owner have all the responsibility of the business' management and development. As private limited company, the business cannot be traded publicly and only one shareholder is needed. Starting as a limited may take more risk than sole trader.
Connection
In chapter 15, the whole chapter is talking about how to determine a business' status and health. This article is also talking about status, but slightly different from the one in chapter 15. The status in the text book is about how well a business is running; and in the article, the status is about the way the business is running. However, when insiders or outsiders are looking at a business, they should look at both status to see if the business is profitable and if the way of running it is correct.
Reflection
Before I have read this article, I thought a business that can make money is good enough. After finish reading this article, I think there are a lot more things to consider with when looking at a business. Not only the profitability and heath, but also the management, tax, legal problems and the image of the business. These status break down into more and further questions( like its office, employees, equipment, and shareholders).
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1 comment:
I can see after reading this blog that starting a company is very complicated. There are many ways one can choose to run a business and this choice, in the end, will affect the success of the business. Like the information in chapter 15, if a calculation of the business is not favourable, the owner has to change methods and ways of running the business to make their business better. I see this impact in real life because of my dad's business. Two years ago he had a very hard decision to make. He was working long hours and 7 days a week and even though their sales was great, the business wages and expenses we great as well. He decided to sell of his business but not his land because he wanted to relax for a while; I agree with his decision. This is because his reports and calculations show that over years this business has not gotten better but the expenses have; He made a good desicion in taking a break.
~~Betty Sung
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