Main Business Organizational Structures Within England and Wales - Assignment Example

ASSIGNMENT, BUSINESS ASSESSMENT 2 Introduction It is important to highlight that this is an assessment paper that delves in the critical evaluation of the financial management in a company. This was a kind of business hat involved the use of the ready cash in the investment purposes. This is the case of what happened to the Telephony Company. The customers were put into the deal and were to make purchase for the mobile of phones at exorbitant prices and later get paid for their money that they spent on the transaction. The business as well went an extra mile and was lent cash to enable it to expand in terms of operation (Chan, 2010). Another important aspect that is worth mentioning in the paper is the fact that there was a limited period of time that the company gave when it comes to the claiming of the funds by the owners of the money used in the business operation. This was therefore the means that the company employed to enable it to realize exorbitant sales and so is the profit. It is quite normal that the aim of every business entity is to make profits and so all businesses will do all he possible actions just to enable them reach this aim. During the liquidation, the firm therefore found out it a bit challenging since there was the need for the payment of the moneys that were taken from the mother company, Fone4U to the new subsidiary company Telephony Limited. This is the case that the company is now facing. It therefore calls for the necessity of giving some pieces of advice to the various stakeholders who were involved on this kind of business transactions on he various measures that they can take to save the situation (Alex, 2012). On giving advice to the customers, it is important to highlight that the customers need to take various actions to enable them to get the 60% of the finances that they are entitled to claim from the company. For any transaction that involves parties, it is always very clear to have a written document as proof that kind of show that there was an agreement that was made by the parties. This therefore binds the company with the other parties who are affected in one way or the other based on the actions that the company has taken. Considering this, it is important to note that the customers therefore were in some form of binding agreement with the company that they were to claim the money in limits of three days and because this was quite short for certain customers to make it there, some had to let the money stay and continue with the business operation (Matt, 2011). This was the core factor that made the business to make a lot of profits. In the process there were the claims that were made by the customers two years later concerning their cash that the business used. However, the financial position of the business later went down when the business had to repay all the money that belonged to the other people (Shafaei, 2009). Advice to the customers Considering this kind of business, it can be clearly noted that there was a breach of contract that was exercised here by the company. Considering the agreement between the company and the customers, it is important to highlight that the customers had the rights legally to sue the business in a court of law given that they filled the required documents in a span of days that was required by the business. This was their right that was being violated by the company and they were had all the powers to claim the 60% of the money that they were entitled to claim in the profit of the business. This is therefore the core reason that they can use to pin down the company with (Robert, 2013). It is important to highlight that the external business environment is composed of the customers alongside the other components. It is therefore very important for the business to involve itself in various moves that would not affect the relationship between the company with the customers as well as the other components of the external business environment (Brian, 2010). Considering, it can be clearly noted that the company, Fone4U started the initiative and started another operational branch. This could possibly be perceived as a way of hiding from the customers in regards to the claim. The business in question that the customers were in contact with is not the current one that sells the telephones. This can therefore bring a lot of controversies. Tracing financial transactions that are in this kind of flow is not that easy and another recommendation that can be given to the customers is that they need to avoid venturing into risky business when the terms and conditions are not that are quite urgent and not conducive and convenient for their operation (Hill, and Laurence, 2009). Advice to the liquidator of Telephony whether he can recover the loan repaid to Fone4U Considering the state of the company, the liquidation exercise of this company is quite challenging even to the liquidator. This is so because the there are various persons who are involved in this deal and they have their claims though other claims were very urgent and others quite late and all the stakeholders have to be considered in this situation. This therefore calls for proper consultation by the liquidator of the company in terms of making claims for recovering the money (Chan, 2010). When it comes to the liquidation exercise, it is quite in order for the person appointed by the company to ensure that all the company assets are sold either through auctioning and any other method of determining the price of a commodity. This can be very effective in the coming up with other additional funds that can assist in the payment of all the money that is claimed by the Fone4U Company. This will ensure that all the customers who make claims concerning the money are as well catered for in the sense that they will be having some cash to pocket out of all that had been invested some times back. This is a very critical exercise that requires very sober decision making minds for it to be effective and efficient that tends to favor both sides of the parties involved (Brian, 2010). Advice the liquidator of Telephony whether he can take proceedings for wrongful trading against Mayo, Charles, Sandra or Fone4U It is important to highlight that for effective business management to be realized in a company, it is very vital for the company or the business to ensure the persons who take part in the management possess the right and relevant business knowledge. Management staff in a business is the key persons who are responsible for the formulation of policies as well as other schemes of operation. Coming up with policies spells out that the management staff have identified a given problem or market gap, collected all the required resources that are required to start and operate the gap thereby filling the gap through the implementation of the policies and schemes (Robert, 2013). For the case of the of the management staff of Telephony, and Fone4U, it is very important to highlight that the liquidator can take legal proceedings against the three people together with the company. This is in the sense that managers seemed to be quite conning in a way as the business seemed to be based o luck and with the coming up with a new branch, it can be clearly noted that this possibly be a way of evading other deals. The business was therefore to make ways and involve itself in very accepted form of business. Another reason for the taking of proceedings is that the management staff was the people who came up with the schemes concerning the business. This therefore means that the staff were the once who had all the required knowledge concerning the transaction (Hill, and Laurence, 2009). Main business organizational structures within England and Wales It is important to highlight that this comparison takes into consideration various variables or factors of comparison. These factors include the legal personality, status, formation and administrative requirements. Under this, it is noted that the various organizational structures of businesses are permitted by the laws of these two nations. This allows for the sole proprietorship form of business, partnerships as well as the limited company. It is important to highlight that the two states are similar in terms of the business operations as well as the set up. These are described I details as shown below: Sole proprietorship Just as the name suggests, it is a type of business entity that is fully owned by one person. This is an incorporated form of business that fully depends of the life of the owner. All the decisions are made by the sole proprietor, all profits are enjoyed b the proprietor as well as the losses suffered by the proprietor. The owner is as well the one who raises all the capital that is required to start and operate the business. This is similar in all the two nations (Shafaei, 2009). This kind of business is easy to form. Just as it is in England, the same applies in Wale; there is no legal procedure that is required here. The owner can decide and start operating the business. Regulation only comes in when there is need for licensing. I is also important tio reiterate that the business has unlimited liability. This is because the business has same legal life as the owner. In the event of liquidation, the owner is therefore the affected thereby leading to bankruptcy (Hill, and Laurence, 2009). Partnership This is a type of business that is formed by a minimum of two members and a maximum of 50 members. it is important to note that these members must be having a common interest in order to come together to form this kind of business. They are therefore profit oriented in the kind of business. The members of this particular type of business are liable to the operations of the business as required and stated in the law. Action that is conducted by one partner on behalf of the business therefore affects all the other partners even if they were not involved. This is always in accordance with the Partnership Act of 1890. This is therefore the essence of having a partnership deed which clearly spells out the way the partnership should be governed and managed. This form of business structure is always more advantageous compared to the sole proprietorship in relation to the capital formation as well as the sharing of losses encountered by the business as opposed to sole proprietorship where the proprietor suffers all the losses and raises all the required capital for the stating as well as business operation (Alex, 2012). Companies These are business entities that have separate legal existence from the owners or the shareholders. They are formed under the Company’s Act and registered with the Registrar of Companies. It is important to highlight that companies are of four types: i. Private Company Limited by the shares: - This is the type of company whereby the liability of the members or the owners of the company is limited because the shares that they hold being not paid (William, Lauren, and Maura, 2012). ii. Private Company Limited by guarantee: - This is the type of company whereby the limitation in terms of liability is is a result of the amount of capital contribution that was agreed upon (Robert, 2013). iii. Private Unlimited Company where there is members have unlimited liability (Brian, 2010). iv. Public Limited Company: - This is the type of company where the shares are easily transferable to the public through subscription (William, Lauren, and Maura, 2012). In terms of the formation of the company, there are legal requirements that are mandatory be filled and submitted to the Registrar of Companies or the Company House. He documents include the Memorandum of Association (MoA), Article of Association (AoA), The Declaration of Compliance with the Requirements of the Company’s Act which outlines clearly that the law anticipates the company to operate only after receiving the certificate of incorporation. The Memorandum of Association spells out very sensitive details concerning the company. These include the name of the company and the location such as Wales or England. Other details that are in the documents include the company objectives and goals; these are all the set targets and missions that the company intends to accomplish by the end of the operating period and it as well contained the statement of share capital (Hill, and Laurence, 2009). Article of Association on the other hand contains all the details that relate to the making up of the company. This is the structural composition of the company. The other elements that are contained include the procedures for calling and conducting of meetings, the legal rights of each shareholder, the steps that are followed while sharing the dividends, losses and even during the actual termination of the company itself and finally the powers, obligations and rights of the directors if the company. It is therefore important to highlight that the purpose of the articles is therefore to spell out clearly the roles to be executed as well as the rights as well as the powers of all the management (directors) of the company (Matt, 2011). The decision making processes within various organizations Decision making can be described as the process that occurs when one is at a state of making up the mind, thereby making one to make a choice from a wide range of possibilities. It is important to highlight that this occurs after a long consultation either within the person, with other people or any other relevant resource that can be ideal to enable one make a choice o a given situation. It therefore assists in the decreasing the levels of uncertainty. This is through the having clear set targets to achieve, all the relevant information collected and the critical evaluation, assessment as well as the analysis done effectively (William, Lauren, and Maura, 2012). Decision making is a very sensitive and crucial process in the human life. This is si because any choice that is made could probably be having some consequences and some decisions are near impossible to correct once they are made. The decision making process therefore comprises of five steps as they are well discussed below and illustrated using the decision masking chart (Shafaei, 2009). Step 1 Critically Identifying/clarifying the decision to be made It is important to note that one only makes a decision after considering various options that are together with the choice that is to be made. It is therefore very much in order for the person making the decision to critically and carefully select the choice that he or she makes. They should then make it clear that it is the choice that has been made and so is the decision made concerning a particular issue. The clarification bit of it as well involves all that is incorporated within the choice or the decision that has been made (William, Lauren, and Maura, 2012). Step 2 identifying the alternatives as well as the other possible decision options Under this, it is quite in order to acknowledge the other possible alternative that you would prefer if in case the chosen alternative could lead into a failure or that it is not relevant to the matter in and. This therefore calls for the weighing of the options. It is here that the person making the decision therefore clearly gives the reasons for the other alternative that is kind of put stand by to replace the chosen alternative in case of any failure (Hill, and Laurence, 2009). Step 3 Collecting and processing all the relevant information Before making decision, it is very much important to collect all the information regarding the choice that you are about to make. Try and ascertain all the pros and cons of the decision and weigh the options. This should be spread across all the possible options and weigh the options as well. This will be quite effective in the making of the appropriate decision. During this, determine which option ha more negative repercussions than the others and which one has got more benefits compared to all the options. This will therefore help in making the right choice for the matter in hand. This is done after the decision maker has properly processed the information through conducting of various studies and even understanding the information better (Shafaei, 2009). Step 4 Making, applying and implementing the decision Having weighed and put into consideration all the aspects of the choice in regards to the importance of as well as relevance, a decision is therefore. This is thereby followed by the practical application and implication of this kind of decision made. This is through the implementation of the decision (William, Lauren, and Maura, 2012). Step 5 Evaluating and critically assessing the decision It is important to note that during the implantation stage of the decision that has been made; the consequences and effects will be very vivid. This is where the evaluation and assessment of the decision will therefore be seen. The evaluation and assessment will try to ascertain whether the decision that was made was appropriate and relevant to the situation. The diagram above therefore shows the decision making process. It moves from the first step that is well labeled as 1 and moves through steps 2, 3, 4 and finally to step 5 (Matt, 2011). The concept of corporate governance The concept of corporate governance states that the companies are judged and managed effectively with the interest of all the companies. This is also with the application of various set systems that are favorable to all the companies. These are systems of regulations that are used in the effective governance of the companies. It can as well be highlighted as the blue-print that the company uses as its development and governance framework. This is to ensure that there are proper accountability measures taken into consideration for efficiency as well as being fair in operation through transparency. It as well spells out how better the business or the company can effectively associate well with the stakeholders (Hill, and Laurence, 2009). Importance of corporate governance i. Accountability:- through corporate governance, it is important to highlight that all the actions that are made within the business environment by the company are on the company. This therefore means that it guides on high level of how a business becomes fully accountable to itself through actions that it engages itself in (William, Lauren, and Maura, 2012). ii. Effective business management: - it is important to highlight that through this kind of governance; there would be high management levels that are taken into account given that that will be proper auditing and counter-checking of all the business essentials. This will be with the motive of evading losses not to be incurred by the business. This will as well ensure that there is no possibility of corruption and the common embezzlement of funds that is always a rampant challenge in most of the business entities (William, Lauren, and Maura, 2012). iii. Enhances good association: - corporate governance gives clearly how the business or the company relates well with the government, customers, suppliers, as well as all and any other stakeholder that can affect the operations of the company in one way or the other (Matt. 2011). iv. Good performance: - it is important to highlight that through corporate management; there will be high levels of sustainable business performance and sustainable growth. This will be of quite economic importance to the business and to the economy as a whole. It would ensure that there is continuous productivity undertaken by the business and that the there would no shortage. This will be enhanced by the business making enough purchases and in case there will be need to shut down or stop the operations, them the general public will have to be notified earlier in advance (Chan, 2010). The various duties, rights and forms of liability within the business context It is important to highlight that liability are the loans that are accrued to the business. There are various persons that are within the business for the effective operation of the business. The business is always the principal while the others operate as its agents. These agents perform the following duties for the business (William, Lauren, and Maura, 2012). The agents represent the principal or the business and can conduct certain actions in place of the business (Hill, and Laurence, 2009). They work under the authorities and controls of the principal or the business and therefore this implies that they execute their duties based on the orders that are given by the business management staff and team (William, Lauren, and Maura, 2012). They tend to be peaceful in their operations by averting high and any possibility of conflict that may come up. This could be anything that could probably be in a position to devastate the principal business (Shafaei, 2009). The agents also ensure that during their operations, they follow the laws and regulations to the latter and those they do not violate any legal requirement. This is because they are the epitome of the principal business (Robert, 2013). The role of the Companies Acts and precedents in creating a legal system for companies The company’s Act is a very vital legislative procedure that aids in the ensuring that business competitions in the market are conducted in a healthy way. One factor that is worth mentioning is that in terms of precedence, the Act is binding all the companies. It also ensures that businesses are responsible in a social manner. The Act consequently helps in the monitoring of the ethical matters in the society. Finally kit assists in the efficiency in terms of service delivery thereby avoiding exploitation of consumers (Matt, 2011). The governance principles for the company law Principles are the guiding concepts. These are as they are highlighted below: The role of the board and how it relates to the law:- this states clearly all the responsibilities that are to be carried out by the board of managers and also the ex-officio who arte the business lawyers (Ilangkumaran, & Kumanan, 2009) Stakeholders’ recognition: - this states that all the states that all the stakeholders of the business are considered and acknowledged in the business and their roles well outlined (Hill, and Laurence, 2009). Independence of the law requirements and legal functions:- this is the body that acts on behalf of the business in legal business affairs. All the matters are reported to the management to be acted upon (Chan, 2010). Rewarding and remuneration:- this deals with how the employee’s salary and wags should be considered and their morale boosted through rewards and better remuneration considering their efforts besides the salary (Brian,2010). Proper allocation of resources to the legal roles: - under this, the principle state that all the legal functions of the company are very well executed accordingly and the legal department should ensure this (Alex, 2012). References Alex, B. (2012). Brilliant Online Marketing: How to Use The Internet to Market Your Business, UK, Cengage Learning, page 642. Brian, S. (2010). Basics Marketing 02:Online Marketing, New York, McGraw Hill Professional, page 231. Chan, H. (2010). Comparative study of adaptability and flexibility in distributed manufacturing supply chains. Decision Support System. 48(2):331–341. Hill, J. and E. Laurence. ( 2009). Public Management: A Three-Dimensional Approach. CQ Press, page 875. Ilangkumaran, M. & Kumanan, S. (2009) Selection of maintenance policy for textile industry using hybrid multi-criteria decision making approach. Journal of Manufacturing and Technology Management. 20(7):1009–1022. Matt, B. (2011). Internet Marketing: An Hour a Day, Willey and Sons, page 432. Robert, T. (2013) , International Business Case Studies For The Multicultural Marketplace, ,Boston, Routledge. Shafaei, R. (2009). An analytical approach to assessing the competitiveness in the textile industry. Journal of Fashion and Market Management. 13(1):20–36. William, K., V. Lauren, and Maura, G. (2012). Complete B2B Online Marketing, Willey and Sons Publishers, page 213. Read More