Describe the legal and financial aspects
Legal status means the concept of companies having a particular place in the market, from this as it determines the laws which affect them There are many types of businesses: sole trader, partnership, private limited company or franchise Sole trader: this involves one person who is the boss and the owner of the company and has unlimited liability and the examples are a builder, a window cleaner and painter etc.
Partnership: This business contains tow or more people up to 20 the share between the partners doesn’t have to be 50% it can be different share amounts partners also have a unlimited liability and some example are doctors, dentists and more. The partners must have a de...
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...ed of partnership which is a contract between partners which legally binds them. The strength is that the partners well get the same percentage of profit as much as they have invested into the company. Private limited company (LTD): To make money quickly the cant sell there shares to the stock market as they have a great weakness.
The owners have the main control in the business normally as they control the business and the main stake holders of the business are board of directors. The biggest strength they have is that if the company goes bankrupt the owners cant loose there personal positions so they pay off depts. Franchise: This is when the company such as McDonalds sells the rights and the promotion to the person to user there brand and logo to sell its products, services and logos, usually in a defined area.
The person that gets the rights gives royalty to the users as this will involve paying fixed fees and a percentage payment of the franchisee’s sales turnover. The main strength of this is that the business is a success and that the advertising is mainly from the franchise company so this gives advertisement for all the franchisers that own the different branches. Our business is a partnership which is made up of two partners Abdul which is me and Sonny which is my partner in our business which is called Ultimate gaming which is a game shop as well as a computer shop.
We chose this because that we new that the business would be quite successful and also that the market demand was quite allot as well so that our best option was a partnership and also that all the profit made will belong to me and Sonny so we can invest more money into the business our other potion was to become a corporation such as a (LTD) but we chose not to because we would have to pay allot of corporation tax as well as we would have to do allot of paperwork and get permeation for allot of things. National and local laws: Sale and Supply of Goods Act 1994:
The goods that we buy from the other company must be quite good in quality such as the games that we buy from the suppliers must have the products new and working order, this must be kept in our top priority as if we do not consider this will lead to the customers getting upset and also returning the item back and asking for there money back. The law stated that if the item breaks within 12 months the customer can get there money back, also the item must be described as the item is there cannot be and default description of the item e. g. if the consol such as Xbox 360 must have the described memory if it says 60 GB it has to be 60 GB.
The Sale of Goods Act 1979 and 1995: In this act the goods must be as described e. g. the goods condition must be stated as the item is. The items quality must be at a sufficient level so that the customer is satisfied with the products and the services that are being provided.
The items that are being sold should be what the customers want e. g. if the person wants a laptop of a pacific game me, Sonny and the other employees should offer the customer what they want and nothing else. Consumer Protection Acts 1978 and 1987:- this is basically there to protect customers and to make sure that what ever it is that customers are buying is to the highest standard as possible and make sure that they are selling whatever it says on the label. And we also have to make sure that if we decide to reduce prices then the old price was there for at least 28 days. Unsolicited Goods and Services Act 1971:-
If by mistake you are sent something that you haven’t ordered for then you have the right to keep it as long as you call up the company and tell them to recollect it and if it isn’t collected within the 30 days of notifying the company only then you can keep it.
The local and national laws that affect our business are the sales of goods act this affects us in a way that if we don’t describe the items as they are customers can get there refund back and will give bad reputation to the society and other customers about our business so we have to describe the items as they are e. g. if a game is used and its only used for a week we still cant say that the item is new and must describe it as used.
The other is customer protection act this will affect our business in a way that we have to make shore that the customers are buying the authentic goods so that they don’t take us to court also we have to maintain the high standard of goods so that people don’t consider us as ripping them off but we make a good reputation in society so that more and more people come to our shop this act is benefited to the customers as this gives them the right to investigate if the items and products bought are good or not.
The last act that affects our business is the sales and supply of goods act this will affect us in a way that if the customers have and now that the items are in great condition and the items are genuine then the customers will come more often to our shop this act will allow our business to purchase great and excellent products to benefit the customers needs and improve our sales and customer relations. Health and safety:-
We have to make sure that there are not any health hazards for either the customers or the employees and if there are any there are pointed out to reduce any unwanted incidents. Because if by any chance we don’t point out any hazards and some one gets hurt than we could end up paying a lot of compensation which could mean a lose to the business. We would be making sure that we have got a first aid box in our shop in case anything happens.
There could various types of health and safety issues in a work place but the only health and safety issues that I could possibly have in a work place are slip and trip from wet floor this hazard could be caused by any spillage to reduce the chances of any one falling from that I would have to put a warning of wet floor so that both customers and the employees are made aware of it and are careful when walking around that area. Under the health and safety act 1974 I would have to make sure that all the hazards are pointed out and I have first aid boxes around the shop so if in any case some gets hurt it is possible to give them quick aid.
However I would also have o make sure that all my hazard and first aid boxes are checked are regularly. To avoid risk of losing cash and customer information I will be using more electronic methods. I will also try to keep minimum amount of cash in the shop so I have the minimum risk of losing the money I will also try to put in the bank on the regular basis. However I will also make sure that the employees have the minimum amount of cash on them.
It is also important that we make sure that if we are serving any food to our employees it is safe to eat and is hygiene because if the food we are providing is not safe to eat than our employees could end up being sick which would mean that they might have to take some days off work which is a bad thing for our business and apart from that we might end up paying a lot of compensation to them which could mean a lose in the business. However we would also have to make sure that the shop is not dirty because if it is than there is a great risk of either the employees or us catching germs and being end up sick.
Liabilities:- Me and sonny would share the profits equally between us. Both of us we are be partners and eligible for 50% of the profit and at the same time for the 50% of the lose as both of us are investing 50% each in the business. We would be paying half of the taxes on all the profit we make such as sales tax and income tax as people who own their business have to pay taxes on any profit that they make. Both of us will be responsible for all the debt as well and in some cases we might have to end up paying it from our own personal accounts in case our business is a lose.