Info point: Types of business organisations in the tourism industry Read the information about business organisations in tourism and match the statements (A–L) with the correct types of business (1–4). Some statements may be true of more than one type of business. 30 a A Each partner pays tax on their share of profits. G This company can raise large sums of capital. B The company ceases to exist at the death of the owner. H The number of shareholders cannot exceed a fixed number (usually 50). C Owner liability is limited to their shares in the business. I Shares can only be transferred if the other shareholders agree. D Shareholders receive dividends out of the profits. J Partners share losses of the company. E The company ceases to exist at the death of one of the owners. K The business is managed by a board of directors and a chairperson. F The owner has complete control over the company. L It is the simplest way of running a business. The term ‘business’ refers to all activities that provide goods and services. ‘A business’ or ‘a business organisation’ is some kind of company, firm, corporation or enterprise. You can classify them according to the type of ownership. Public sector companies (nationalised industries) - owned by the state on behalf of the general public; examples: water, transport, electricity, national and regional tourist boards - membership organisations: funded from public money, but also raise income through membership subscriptions, e.g. English Heritage Private sector companies Among these you can distinguish between a one-person enterprise or sole trader, a partnership, which can be owned by 2 to 20 people, a private limited company (ltd), e.g. a family-run firm, and a public limited company (plc). The type of business organisation determines the legal and financial obligations of its owners. 1 Sole trader ■ ■ a relatively small amount of start-up capital is needed ■ ■ the owner keeps all the profits ■ ■ the owner has unlimited liability and is accountable to the tax authorities ■ ■ the company has no separate legal entity ■ ■ examples in the tourism sector are tour guides, caterers, activity instructors, taxi drivers 2 Partnership ■ ■ several people contribute capital, expertise or both ■ ■ the owners have limited or unlimited liability (depending on the contract) ■ ■ all profits, expenses and the management of the business are shared ■ ■ in tourism, partnerships are common in the hospitality sector, i.e. pubs, cafés, small hotels 3 Private limited company (ltd) ■ ■ it has a separate legal entity ■ ■ it has limited liability ■ ■ more people contribute capital ■ ■ there is no sale of shares to the public ■ ■ its accounts must be available for inspection ■ ■ popular business form for travel agencies, tourist attractions, country house hotels and tour operators 4 Public limited company (plc) ■ ■ the largest type of business in the private sector, often a multinational (company) ■ ■ its shares are traded on the stock exchange ■ ■ another company can buy shares in it and make a takeover bid ■ ■ its liability is limited to the money invested ■ ■ there must be an annual general meeting (AGM) and annual report ■ ■ most big players in tourism are plcs, e.g. Hilton Hotels, British Airways Find an example of an obligation, an advantage and a disadvantage for each type of organisation. Talk together. Did you choose the same points? Example: A sole trader has the obligation to pay taxes for the company. An advantage is that not much capital is needed, but the owner’s unlimited liability can be a disadvantage. b 38 Language skills Extras Explore 3 Success Nur zu Prüfzwecken – Eigentum des Verlags öbv
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