Entrepreneurship

1. Entrepreneurship Business Setups (C) Krystle Attard 2013

2. Economic Sectors The economy can be divided into two sectors: • The PrivateSector • The PublicSector • Emerging model: Private -PublicPartnerships (C) Krystle Attard 2013

3. The Private Sector Firms owned by private individuals • Sole Traders • Partnerships • Private Limited Companies (Ltd) • Public Limited Companies (PLC) • Franchises • Cooperatives (C) Krystle Attard 2013

4. The Public Sector • Government Structure – Ministries, Government Departments, Local Authorities • Public Corporations – provide essential services for a decent lifestyle • QUANGOs – National Authorities, Regulatory Bodies (national level) (C) Krystle Attard 2013

5. Public Sector continued… Private – Public Partnership • An enterprise jointly owned by the Government and the private sector • Defined in terms of shares (C) Krystle Attard 2013

6. Liability of companies • Limited liability – owners not personally obliged to make up for company debts if it goes bankrupt • Personal possessions may be reclaimed by creditors if they are not used for standard of living • Unlimited liability – owners may have to cover debts of a bankrupt business by selling personal possessions (C) Krystle Attard 2013

7. Private Companies • Limited Liability Companies (Ltd.) • Public Limited Companies (plc.) • Criteria set by local authority: MFSA • A minimum threshold of company assets • Plc. – sells shares to the public (C) Krystle Attard 2013

8. Franchises • Set up business under an established name • No marketing costs • License fee paid annually • Part of profits go to mother company • Outlets adhere to specific requirements (C) Krystle Attard 2013

9. Not For Profit Businesses • Charity-based organizations - not for profit • Typically receive donations or funds from groups or government • Any financial surplus is ploughed back into the organization • Focus on providing a community service (C) Krystle Attard 2013

10. Sole Owner / Self Employed • Managed and operated by one person • Tasks may be delegated to family members • No formal employees • Unlimited liability • Accountant draws up annual accounts (C) Krystle Attard 2013

11. Partnership • 2 – 20 partners • A combination of active and sleeping partners • 1:1 ratio for sleeping/active partners • Unlimited liability • Bound by legal contract (C) Krystle Attard 2013

12. Private companies • Private or Public Company • Group of Companies • Franchises • Limited Liability • Assets exceed an established threshold (C) Krystle Attard 2013

13. Private and Public Companies • Both have limited liability • Private companies: ltd. denomination • Public companies: plc. denomination • plc. - offers shares to the general public • plc. – publishes accounts at least annually (C) Krystle Attard 2013

14. Group of Companies • Limited liability companies owned by the same person(s) • Not always in the same industry • Corporategroup– same industry • Conglomerate– different industries • Merger– companies taken over by others (C) Krystle Attard 2013

15. Franchises • Premises hired out to an established company • Adheres to strict regulations • Rules vary from size of premises to pricing • Marketing costs provided by head office • Percentage of profit goes to mother company (C) Krystle Attard 2013

16. Cooperative • Sole owners join forces • Unified marketing campaigns • Similar to partnership setup • Pool resources for mutual benefit • Owners may also be employees (C) Krystle Attard 2013

17. Small Medium Enterprises (SMEs) Usually defined in terms of number of employees • Small enterprises - up to 20 employees • Medium enterprises - up to 500 employees • Different thresholds for defining enterprise size (C) Krystle Attard 2013