Unit 9: Business Organization

Many businesses are owned and controlled by a single person (called a sole trader). There would not be much capital required and he would no doubt be given credit by his suppliers. This would give him the opportunity to sell goods to his customers before having to pay for them. He would no doubt turn to his bankers for temporary loans if, and when, these were required. If he wanted to increase the size of his business he would either turn to the bank for longer-term support or “plough back” some of his profits. The attraction for the sole trader is that he has maximum control over the business, making decisions without reference to others.

Other businesses are organized in a form of a partnership. Each partner provides a part of the capital, and the profits and losses are shared on an agreed basis. The amount of capital which can be raised is restricted by the personal wealth of the partners and is likely to be inadequate for the modern large-scale enterprises. Partnerships tend to remain relatively small, predominating in retailing and the professions. Solicitors’ practices are often in the form of partnerships, one of the partners concentrating on conveyancing, that is property sales, another on litigation, that is lawsuits, while a third deals with probate, that is wills and trusts.

The problem with partnerships is that all partners are liable for the debts of the firm, irrespective of the amount of capital they invested. So it would be possible for an extremely rich person to have a small stake in the enterprise, but to lose all his personal assets if the business fails.

A business which is drilling for oil or producing motor cars will obviously need extensive funding and they will be able to obtain money more easily from the public if they are in the form of a limited company. This is because if the company becomes insolvent the shareholders only stand to lose their original stake, the price they paid for their shares.

An enterprise requiring large amounts of capital would probably have its shares quoted on the stock exchange and this would give its shareholders the opportunity to dispose of their shares more easily, if they so wished. Different classes of shares may be issued but, in general, the ordinary shareholders have voting rights which give them power to elect the board of directors who will organize and control the company’s activities.

Unit 10: America Online

America Online (AOL) is a communications service that provides users with access to both the Internet and special AOL content. It offers 19 channels of content and features, covering topics such as news and entertainment. Members can obtain up to five email addresses per account, as well as 10MB personal home page space. Buddy Lists and instant messaging features are also included. With an AOL account, you can utilize a vast array of chart rooms, message boards, and online stores. Other features include online screening software, user profiles, and easy access to the Internet with AOL’s own browser. The installation utility simplifies setup by locating local dial-up numbers, finding your modem, and configuring your software. AOL provides hundreds of widespread dial-up numbers, many of which offer speeds of 56 kbps. Standard accounts cost $21.95 for unlimited access. Less expensive accounts may be acquired, but charge per hour after a time limit has been reached.