Discuss the main differences between firms and organisations that work in the wider uk construction sector(discuss,plc,ltd,dlo,sole traders,the parterships,the - Essay Example

Trade and Industry, UK, the privately run small and medium enterprises (SME) numbered 4.3 million at the start of 2004, as compared to 4 million in 2003. These enterprises are engaged in all areas of economy – primary, secondary and tertiary – with agriculture, fishing, forestry, construction and services dominating the scene. Coming to the legal status situation, sole-proprietor concerns were 2.72 millions, partnership firms were 540 thousand and companies were1.02 million in number. Sole proprietary concerns are easy to set up.

They have no separate legal status other than the individual setting them up. Profits are fully owned and taxed together with other personal income. They have a high degree of flexibility and freedom of decision-making. Statutory audit of accounts, or divulging records to public is not necessary. As against these benefits, they suffer from the significant disadvantage of unlimited liability including risk to personal assets, not deployed in business. Funds constraints often affect these units, since there is no equity participation by others and all the funds are either owned or borrowed.

Ownership cannot be transferred but the business itself can be sold off as a going concern. The burning desire of a large number of entrepreneurs to venture into business and the obvious ease with which sole proprietary concerns can be set up explains the predominance of this class of enterprises, as seen in the statistics noted above. Unfortunately, it is also one of the reasons for the unusually large number of business failures as well. Partnership firms also enjoy many of the advantages of sole proprietary concerns and are relatively easy to set up.

Collective experience of the partners gives edge to decision making. Statutory audit of accounts, or divulging records to public is not necessary. However, unless otherwise provided for in the partnership agreement, death, bankruptcy or retirement of one personal income and