Business and transport Essay Example | Topics and Well Written Essays - 2000 words

Business and transport - Essay Example The second part of the paper will deal with modes and types of transport and travel around the world where examples of sole traders may be found. The paper will also suggest potential remedies to overcome the inherent issues that a sole trader operating in transport sector would face. Part I Sole Trading When a person individually initiates and operates his/her own business, it is called sole trading. This form of business may have one or more employees. It generally involves fewer amounts toward capital investment as compared to other modes of business ventures. It is best fitted to people with innovative business ideas and sufficient capital for running their business. The main benefit of this system is that the businessman owns everything what he acquires from the business. Moreover, with the feasibility of self guidance, the individual can grow without restrictions. In addition to this, as Tonkin (2006) states, sole trader can start the business with minimum set up cost and can c ontinue operations without a tax file number. He is also exempted from many other legal charges and superannuation. The most competitive strengths of a sole trader is that he can easily offer specialist services to customers and cater the needs of local people. On the other hand, sole trader is not free from risks as he is the only person responsible for any loss incurred in the business. A series of legal obligations may also drag him out of the line; sometimes he needs to pay provisional taxes and hence his annual tax returns may become more complicated. It has been identified that sole proprietorship is the most common form of ownership in the UK. In UK, sole traders are legally required to keep proper business accounts and records for assisting Inland Revenue to collect the tax on profits. Public limited company In UK, a public limited company is ‘legally abbreviated to plc with or without full stops’ and it may either be ‘an unlisted or listed company on stoc k exchanges’ (Company formation). However, some exceptional public limited companies, mainly nationalised concerns, which have incorporated under special legislation, do not need to bear any of the identifying suffixes. When a new company plans to commence its operations in England, Wales, or in Scotland, it has to register with Companies House. Although a public limited company is not compulsorily required to offer its shares to the public, many such companies do so and these shares are generally traded either at the London Stock Exchange or at the Alternative Investments Market. In UK, a minimum of two directors is essential for the formation of public limited company. Under this system, many persons jointly invest their capital for the formation of company at the time of its registration. Before a public limited company commences its operation, it should issue its shares to the value of at least ?50,000 and out of which ?12,500 must be paid up. Similarly, a company may inc rease or decrease its authorised share capital by passing an ordinary resolution. The public limited company may issue different types of shares like bearer share, cumulative preference shares, ordinary shares, preference shares, and redeemable shares. Nowadays, most of the UK companies are formed electronically with the help of Company Formation Agents. During the company formation, documents such as Memorandum of Association, Articles of