Partnership

Income Segmentation although Guinness don’t directly segment its product into different segments, Guinness beers are more expensive to the consumer because they target customers may be willing to pay more for what some pensive to be a distinctive taste – a taste which is more expensive to produce. The Japanese distribution system Distribution channels in Japan are very different from other countries; they are as inefficient as they are complex. The system is characterized by multiple layers of wholesalers who have developed close, personal relationships with other wholesalers, manufacturers, importers, and retailers.

Moreover, these intimate relationships often serve as an informal barrier to foreign companies wishing to sell directly to end-users or retailers. Many exporters find retailers/end-users unwilling to disrupt their longstanding, personal relationships with Japanese suppliers even when the foreign company can offer a product of superior or equal quality at a cheaper price. Many Japanese retailers/ end-users are unwilling to make the switch to an “unreliable” foreign supplier. They fear a lack of commitment on the part of the foreign supplier will lead to problems.

They also fear breakdowns in communication. This state of affairs has led many companies’ new-to-market exporters to complain of the complexity and lack of transparency of the Japanese system. An encouraging sign is the recent trend towards greater efficiency within the Japanese distribution system, resulting in fewer smaller retailers and wholesalers. Faced with deregulation and changing patterns of consumption, many Japanese companies are modifying marketing and sales strategies to take advantage of these developments.

Imports are already benefiting from these trends, as seen in increased sales by Japanese department stores and other mass merchandisers and by a variety of new retailing ventures that match changing Japanese lifestyles. There are also indications that some wholesalers are modernizing and consolidating operations, thus reducing more inefficient elements in the system. However, the process is slow. The characteristics of the distribution system are deeply rooted in the cultural history of Japan. How to Set Up Business in Japan/ Laws & Regulations on Setting Up Business in Japan Section 1.

Incorporating Your Business . 1 Types of operation in Japan Foreign companies generally establish a business presence in Japan in one of four modes. 1. 1. 1 Representative office Representative offices are established as locations for carrying out preparatory and supplemental tasks aimed at enabling foreign companies to engage in full-scale business operations in Japan. These offices may conduct market surveys, collect information, purchase goods and implement publicity/advertising efforts, but they are not permitted to engage in sales activities.

The establishment of representative offices does not require registration. A representative office cannot ordinarily open bank accounts or lease real estate in its own name, so agreements for such purposes must Instead De Selenga Day ten nana Outlet AT ten Torrent company or representative at the representative office in an individual capacity. 1. 1. 2 Branch office Foreign companies wishing to engage in business operations in Japan must establish a branch office or a subsidiary company. The simplest means for a foreign company to establish a base for business operations in Japan is to set up a branch office.

The branch office can begin business operations as soon as an office location is secured, he branch office representative determined, and the necessary information registered. A Japanese branch office is a business location that provides services in Japan decided upon by an organization authorized by the foreign company, and ordinarily is not expected to engage in independent decision making. A branch office does not have its own legal corporate status, but instead is deemed to be encompassed within the corporate status of the foreign company.

In general, therefore, the foreign company is ultimately responsible for all debts and credits generated by the activities of its Japanese branch office. A Japanese branch office, however, may open bank accounts and lease real estate in its own name. 1. 1. 3 Subsidiary company A foreign company establishing a subsidiary company in Japan must choose to establish the subsidiary company as a Joint-stock corporation (Kabuki’s-Aisha (K. K. )), limited liability company (Good-Aisha (LLC)), or similar entity stipulated by Japan’s Corporate Law.

Both unlimited partnerships (Gomes-Aisha) and limited partnerships (Gosh-Aisha) are granted corporate status under the Corporate Law, but they are rarely chosen in practice because equity participants bear unlimited ether than limited liability. All types of subsidiary companies can be established by completing the required procedures stipulated by law and then registering the corporation. A subsidiary is a separate corporation from the foreign company, so the foreign company will bear the liability of an equity participant stipulated by law for all debts and credits generated by the activities of the subsidiary.

Other methods by which a foreign company may invest in Japan using a Japanese corporation but without establishing a subsidiary are by establishing a Joint venture with a Japanese enterprise or investment company, and by equity participation in a Japanese enterprise. 1. 1. 4 Limited liability partnership (ALP) It is also possible to do business by using a Huge Seeking Jaggy Kumara. This type of entity, considered the Japanese version of a limited liability partnership (ALP), is not a corporation, but a partnership formed only by the equity participants, who have limited liability.

Introduction In this assignment I am going to identify the purposes of different types of organisations, describe the extent to which an organisation meets the objectives of different stakeholders and explain the responsibilities of an organisation and strategies employed to meet them. I am also going to give examples based on my own personal experience. Identify the purposes of different types of organisation Business organisations can be divided mainly into two sectors. The private sector, which is formed by sole traders, partnerships, companies and franchises.

The sole trader is the most popular form of business ownership. This kind of business is managed by only one individual who puts all of his savings and his time into making it a success. He is his own boss but it also has a negative aspect which is that he has to deal with a lot of responsibilities. For example window cleaning, plumbing. Partnerships can have between two and twenty partners. There can be exceptions for some forms of partnerships such as big accountancy firms whose partners also enjoy limited liability.

This means that they can only loose the amount of money that they have invested even if the business goes bankrupt. E. g. vets, solicitors. Companies are owned by shareholders who choose Directors to give direction to the business. The Chief Executive has the responsibility of making the most important decisions. Specialist Managers will be appointed to run the company on behalf of the Board. Shareholders put funds into the company by buying shares. Every company must register with the Registrar of Companies, and must have an official address.

Private companies have Ltd after their name. They are normally smaller than public companies. Shares in a private company can only be bought and sold with permission of the Board of Directors. Franchises are businesses in which someone gets formal permission given by a company to sell its goods or services in a particular area. The business policies have to be the same in every establishment. The franchise pays a sum of money as capital and the franchisor is responsible of the equipment. The first one must buy a certain amount of supplies from the econd in order to make sure that the quality of the product is the same as the original. This together with a percentage of the profits of the business goes to the franchisor. The advantages of Franchises are that they have a well-known name. For example McDonalds. The main aim of all of these private organisations is to make a profit. Other goals consist on having a good customer service, gaining a good reputation, offering quality products, etc. Even when they do charity events these organisations earn a profit on the long run because of the positive publicity they obtain.

This will make them increase their number of customers and make them look more competitive towards their rivals. The public sector is made up of central government, local government and businesses that are owned by government. A Public Limited Company has its shares traded on the Stock Exchange, which can make it win a large sum of money in a very short period of time. On the contrary the original shareholders could lose the control of the business if large quantities of shares are bought as part of a takeover.

To create a Public Limited Company the directors must apply to the Stock Exchange Council, which will check the accounts. Non- Profit organisations receive donations or funds from groups or governments. All the money they earn from selling goods, which have usually been donated by the public, goes straight back into the organisation to improve the quality of their service. The aim of the public sector is not to generate a profit but also not to waste money just to generate enough to be able to continue with their community services.

Describe the extent to which an organisation meets the objectives of different stakeholders A stakeholder is a person, group or organisation that has a direct or indirect stake in an organisation because it can affect or be affected by the organisations actions, objectives and policies. The following are different types of stakeholders which you could find in the private sector. Owners or shareholders who want the business to be a success because they have invested their own capital and expect to gain a profit out of it.

An organisation has legal and moral obligations to its owners being the most important one to try and ensure that they receive an adequate return on their investment. Employees are a vital part of any organisation. In order for a business to succeed it needs to offer a nice working atmosphere and pay good wages to their employees to keep them motivated at the workplace. One way to achieve this is by implanting performance related bonuses which are usually related to the success of the business as a whole. In this case both parties will be satisfied with the end result. Unions.

Their goal is to better the employees work conditions by trying to increase wages and secure jobs. Managers usually have a fluent verbal communication with the union’s spokesperson to avoid any conflicts that could occur if their demands are not materialised even if not completely in some way. Customers. A business has to know how to fulfil their customers’ needs which includes offering quality products at a reasonable price, that the goods they have gone to purchase are available because otherwise they will go to the competition to get them and that they receive good customer care.

All of these factors will make the organisation have a fixed clientele because they will come back if the experience has been good and it will also make it gain customers thanks to the word of mouth recommendations. All of the above are primary stakeholders as they have some direct interest or stake in the organisation. Secondary stakeholders are public or special interest groups that do not have a direct stake in the organisation but are still affected by its operations. Some examples could be the local, state, and federal government, trade and industry groups, media, competitors, etc.

Explain the responsibilities of an organisation and strategies employed to meet them Organisations not only have moral and ethical responsibilities towards a range of stakeholders but also towards the wider community. The term Corporate Social Responsibility (CSR) refers to the responsibilities that modern business organisations have to create a healthy and prosperous society. They also have legal responsibilities which include consumer and product laws, environment laws and employment laws. These laws obligate the organisation to create new jobs, reduce contamination by for example using plastic bags that can be recycled, etc. nd at the same time they are doing something good for the community. Corporate Social Responsibility involves making sure that the organisations goods and services meet the customers’ demands and are provided in a fair way and also that they are involved in relevant sponsorship and humanitarian activities to help social development. Normally there are eight main types of strategies in which an organisation can be involved with at any time: Growth involves the expansion of a business, its markets, products, size, etc. For an organisation to grow it needs to find up and coming markets where they will be able to make a profit.

Stability involves a consolidation strategy for the organisation. There must be set guidelines so that the business can keep on working efficiently even if changes occur. Profitability. Gaining a profit is essential for nearly every organisation especially for the private sector where shareholders have a lot of influence. Efficiency consists on using the means the organisation has in the right way. It is an important strategy for public sector service organisations to demonstrate that the taxpayer’s money has been used properly.

Market leadership strategies are about being the best in your market. The market leader can obtain cheaper stock because they buy larger amounts of it. Survival. In such a competitive business environment survival is the key to be able to continue advancing. Merger and acquisition makes the organisations benefit from the advantages of integration by for example gaining new customers. Globalisation strategies involve expanding internationally to countries where normally the cost of production is lower and this will make them gain a larger profit.

Based on my personal experience in the private sector in which I have worked for McDonalds and for El Corte Ingles I have observed several differences. On the one hand, McDonalds which is a franchise, pays the minimum wage and their clientele is formed by the working class. On the other hand, El Corte Ingles, which is the first distribution group of Spain in the sales volume sector and is formed by eighty department stores all over the Spanish territory. The wages are higher than in McDonalds and the products they offer are usually select. For this reason customers range from middle to upper class.

Both are commercial organisations which means that their income must be bigger than their expenses. Conclusion In conclusion I have learnt that for an organisation to be successful it needs to adapt to the current situation and has to develop new strategies to be able to compete with rivals. Offering quality products at a reasonable price will make customers buy more which will activate the economy and the organisation will still gain a profit. References The Times 100 Business case studies. Revision theory – Strategy theory. www. businesscasestudies. co. uk VCE IT Lecture Notes – Organisational goals. www. vceit. com :

Legal Forms of Business Paper Law/531 June 3rd, 2011 University of Phoenix Legal Forms of Business Paper Selecting the best form of operating a business depends on the type of business the owner wants to run. The owners have to pick the structure that best meets their needs. “The selection depends on many factors, including the ease and cost of formation, the capital requirements of the business, the flexibility of management decisions, government restrictions, personal liability, tax considerations, and the like” (Henry Cheeseman, 210, p. 529)

Moreover, choosing the right form to run a business will also determine how the business is organized, how the cash flow is, and how the business is taxed. “The most common forms of business organization are: sole proprietorship, general partnership, limited partnership, limited liability partnerships, limited liability company, and corporation” (Henry Cheeseman, 210, p. 529). According to the situation given, the best form is limited partnership. Limited partnership refers to the types of owners the business will have, general (managers) and limited partners (investors).

In this sense, Monica, and Susan will be the managers of the businesses because they both will operate the business with their skills, Susan with her computer graphics skills and Monica with her marketing skills. Whereas Vic will be the investor providing some capital to run the business, she will not be part of management; Vic will act as a passive investor. In limited partnership, managers have unlimited liability and the investors have liability to up the amount of their capital contributions. General partners will control everyday activities in the business. Monica and Susan will be responsible of the business debts as well.

Despite, limited partnership is more complex than general partnership; this is the best form to meet Vic’s, Monica’s and Susan’s needs. Vic will have limited personal liability for business debts as long as she will not participate in management. Monica and Susan will have the possibility of raising money without involving outside investors once they can incorporate enough money to run the business by themselves. Sole proprietorship was precluded because the business will be run by Monica and Susan because they have the necessary skills to be successful entrepreneurs.

In this scenario, Vic will provide capital and will take a passive role in managing the business, she sill obtain profits because of her involvement in the business. For not facing some problems among them, they will have to reach an agreement generally written to state how shares will be handled; this is common called a limited partnership agreement. “This agreement sets forth the rights and duties of the general and limited partners; the terms and conditions regarding the operations, termination, and dissolution of the partnership; and so on” (Henry Cheeseman, 210, p. 547).

The limited partnership agreement will set forth the transactions that managers and investors can approve. This document also states the how earnings and losses will be distributed among the partners. Limited partners have also the right of being informed by general managers about the business performance and the business financial status. If Susan or Monica wants to admit a new partner, the new candidate to operate the business can be included if Vic approves this, unless the agreement document states otherwise. Limited partnership is easy to set up, and to appeal investors as limited partners.

This agreement is good to set arrangements for general partners to use their skills, and to decision-making regarding the business. Limited partners can drop the business without the need for the limited partner to be dissolved. The business form of corporation was not selected because of the process of forming a corporation takes time and money, compared with the rest business forms. Corporations are often audited by the government and have to deal with more paperwork to comply with the regulations of the states in which the business will run. Also, in corporations dividends paid o shareholders are not deductible from the business income; it may turn out taxing this income twice. Corporation is a business form more expensive to create than sole proprietorship or partnership. There is more paperwork in corporation than other forms of business. Corporation carries several tax disadvantages, and pays taxes on its own income. Whereas limited liability partnership was not chosen because of the disadvantages it offers for this kind of business that Vic, Susan, and Monica want to run. Limited liability partnership is more expensive to create and to maintain than sole proprietorship and partnership.

In this form of business if one partner leaves, the business is dissolved. Limited partnership is a good method for Vic, Susan, and Monica to use the limited partnership as a form of business because of the advantages it presents for their good. Through this business form, they can share the profits with a minimum of effort. This form is also easy to attract investors. Monica and Susan can raise additional capital because of the liability of limited partners. There is also less paperwork, and it is easier to manage than corporation. Selecting the best form of business is a strategic decision that entrepreneurs face.

This is an important decision because of the implications it brings to the business, regarding its ongoing legal and tax consequences. The best form of business will depend on the business goals and many other factors with big impact on the business performance. Choosing the legal form is crucial to determine the organization and performance of any kind of business. Entrepreneurs must measure the pros and cons before undertaking any businesses. Word count: 901 Reference Cheeseman, H. (2010). Business Law (7th ed. ). Colorado, DE: Prentice Hall.

This Is In regards to Bella who claimed she had no liability towards the lawsuit against the firm as she had only been working there a short while and was not at work the time the accident happened. Bella had however been working there with a “view for profit” (Text, 328) which happened to be the activity in question. With this same question in mind t has been stated that ” It is possible for a person to be a partner even though they do not have a claim to the share of the profit” (text,328).

Bella had not contributed any capital upon joining the firm but still took on the Job of a partner at the firm through assistance. Unlike the case of “Cox” (text,331 ) whereby ACH party was found with different liabilities for their parts of the Joint venture “Magic Zillions” Is a deferent case as they were continuing with the business In an effort to get a profit. “Where there is profit sharing and a more integrated business structure” (text. 30) as n the case of Magic Zillions it means that there was an aim for profit which is what considers the determination of existence of a Partnership amongst all four persons. In order for a ‘partner’ to have been qualified as retired there has to be written confirmation that Charlie had actually been excluded from his entity and all its business, but the case does not well specify this. The implied 1 OFF partner it means that they “must contribute equally towards losses” (text,335) and in this case the loss is the lawsuit which is aimed at everyone a part of ‘Magic Zillions’. A partner who retires from a firm does not thereby cease to be liable for the partnership debts incurred before their retirement” (text,343), this case of the Liability of retiring partner falls on Charlie. ” Charlie has since retired from the business due to stress and ill-health and has limited personal funds” (facts), although Charlie had been retired but still part of the entity during the accident it disqualifies him from not being liable for the lawsuit against ‘Magic Zillions’ as he was a partner then when the accident happened.

Conclusion

On the balance of Probabilities the Magistrates court would find that Deed, Charlie, Jake as well as Bella are all partners of ‘Magic Zillions’ due to the evidence and supporting cases mentioned above and all would have to contribute to the $30,000 to the plaintiff, Mr.. Laurent to cover the injures he faced upon entering the premises of the defendants, ‘Magic Zillions”

Such issues increase the operating costs of the group which may adversely impact Swore Pacifism’s results of operations profitability. Swore Pacific has operations in Asia, Europe and North America. Despite having a global presence, the group’s operations are concentrated in Asia, mostly in Hong Kong. During PAYOFF, the group generated about 89. 4% of its revenues from Asia out of which 51. 3% were generated from Hong Kong only. Overconfidence on one geographic region makes it susceptible to changes associated with the economic and political situation of the country.

Concentrated operations could also make Swore Pacific uncompetitive against rivals who have globally diversified operations. Partnerships and Joint ventures enhancing business The group is expanding its presence through partnerships and Joint ventures. In December 2013, Swore Foods Holdings Limited, a subsidiary of Swore Pacific, formed a 60/40 coffee Joint venture for Hong Kong and Mainland China with Movements Foods Licensing, a subsidiary of Movements Holding GAG.

Movements Foods Licensing will contribute its brand and its coffee expertise to the new company, while Swore Foods Holdings will provide an area-wide distribution network and its knowledge of the Mainland Chinese market. Similarly, Swore Properties, through Marvel Glory Limited, a joint venture company formed with other partners, entered into an agreement to acquire a wholly-owned subsidiary of CITE Pacific Limited which indirectly owns DC Commercial Centre, in December 2013. These Joint ventures could enhance the group’s business and improve its market share.

Increasing spending on food in merging markets As the global economic shift towards the emerging economies continues, opportunities for several industries including the food and beverage manufacturing sector are created. According to industry estimates, approximately 58% of processed food is consumed by developing countries, owing to factors like a rapid increase in population in these countries. Furthermore, by 2050, it is expected that nearly 72% of the food consumption will happen in the developing countries supported by the fact and India. Swore Pacific derived 21% of its total revenues in PAYOFF through its beverages segment.

The beverages segment of the group has the rights to manufacture, market and distribute the products of the Coca-Cola Company in Hong Kong, Taiwan, seven provinces in Mainland China and in the western US. Counting on these huge markets being created, companies like Swore Pacific are increasing their investments in emerging countries and looking at expanding their businesses. This trend of increasing spending on food in emerging markets is likely to increase the group’s Beverages business. Page 6 As a global business, Swore Pacific is vulnerable to several local business risks in different countries.

The group may increasingly become exposed to changing political, social, legal and regulatory obligations at the national and international level, such as those required by the European Union or the World Trade Organization. These regulations include changes in tariffs and trade barriers; competition law requirements, such as restrictions on the group’s ability to own or operate subsidiaries or acquire new businesses in certain Jurisdictions; delays in the process of obtaining or maintaining licenses, permits and governmental approvals necessary to operate certain businesses; and environmental laws and regulations.

These regulations could have an adverse impact on the group’s strategic planning and geographic expansion. Swore Pacifism’s principal business operations face significant competition across the diverse markets in which they operate. New market entrants, intensification of price competition by existing competitors, product innovation or technical advancement could adversely concern the group’s financial condition and results of operations. The group faces several competitive risks across its divisions.

In marine services division, with a large number of newly built vessels continuing to enter the offshore racket, increased competition is expected to result in further pressure on charter rates. This could result in a decline in Swore Pacifism’s revenues. Similarly, in the property business, an increasing number of developers are undertaking property investment and development in China, which could result in lower returns achieved on the group’s property developments.

Intense competition in the group’s key divisions could impact the group’s financial condition and results of The demand for petroleum and related products has historically been cyclical and sensitive to the availability and prices of oil and related feedstock. Historically, international prices of crude oil and refined products have fluctuated widely due to many factors that are beyond the control of companies like Swore Pacific, which has substantial interest in the aviation business through Catchy Pacific group, the HASTE group and YACHT.

Fuel prices and availability are subject to wide price fluctuations based on geopolitical issues and supply and demand, which can neither be controlled nor accurately predicted. The high Jet fuel price had a major impact on Catchy Pacifism’s operating results in 2012. Regardless of the effect of fuel hedging, Catchy Pacifism’s fuel costs increased by HOOK$323 million ($41. 6 million) (or 0. 8%) in 2012. The Jet fuel price, which was $12. 7 per million British thermal unit (Btu) in 2009 is expected to reach $23. 7 per million Btu in 2015.

It is further forecast to grow to $27. 6 per million Btu by 2030. Furthermore, the political turmoil in the Middle East has impacted the oil prices. Page 7 Historically, fuel costs have generally represented 10% to 15% of an airline’s operating costs, but due to volatility in prices over the past few years, fuel costs have been in the range of to 40% of total operating costs. Thus the increase in global ND regional oil prices exposes the group to extreme fluctuations in earnings, which is likely to have an adverse consequence on its growth initiatives.

Any inability to obtain Jet fuel at competitive prices would materially have an impact on Swore Pacifism’s results of operation and financial condition. Page 8 Copyright of Swore Pacific, Ltd. SOOT Analysis is the property of Marketing, a Denominator business and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use.

Radiant hair and beauty is my local hairdressers. Their aim is to sell good quality hair and beauty products which they have bought from other companies to their customers who live locally. They also give hair, nail and skin treatments to their customers. One purpose is to increase the amount of sales so they give lots of discounts and free products to make customers come back and tell their friends about them. As they exist also to make a profit so that their business can carry on and give their customers the quality of services they give to their customers and so that they can carry on buying products from other companies.

Another purpose is to advertise the shop- they have a website and they are on have reviews written about their services- this is so that they can increase the number of customers . One purpose of Radiant hair and beauty is to improve the quality of the products and services they give to their customers. The advantage of being a sole trader for Radiant hair and beauty is that all profits go to the owner of Radiant hair and beauty because they employ about 3 people because they don’t have to pay their employees a lot of money.

Another advantage is that all decisions made by the owner of Radiant hair and beauty – they can choose to do what they want, when they want because there are very few people (the employees etc. ) to oppose the owners ideas. On advantage is that the owner of Radiant hair and beauty works when they want to – they can open when they want, they can choose not to come to work if they don’t want to and there is no-one to tell them off because there is no-one higher in the business than the owner.

The owner of Radiant hair and beauty can hire and fire at their own free will so if they don’t want some-one in their business, they have the power to sack them. The disadvantages of being a sole trader for Radiant hair and beauty is that business at all times – fails to continue when owner dies- this means that they have to be completely devoted to the business – they often can’t have holidays or have breaks and often when the owner dies and no-one wants to take over the business, Radiant hair and beauty would not continue.

One of the advantages was you could make your own decisions but that can also be a disadvantage because you are responsible for your actions so you are responsible for all your decisions , you have unlimited liability. Size Radiant Hair and Beauty is a micro sized business because they only employ 1-5 people and the owner doesn’t need many employees because he or she knows that they only have a limited number of customers because only local people go there. It is not an international business, it is only in Bermondsey. Scale

Radiant Hair and Beauty is a local business because there is only one shop and that is in one area- Bermondsey. Partnership A partnership is a company that is run by 2 to 20 people who all share the profits and losses, usually equally. In a partnership the owners work together on their business. A partnership is a type of joint investment. There is a deed of partnership which states how the profits and losses will be shared etc. It is easier to set up a partnership than to set up a sole trader business. Most partnerships are small and employ few people but some like D;G are large and employ a lot of people.

Deed of Partnership A deed of partnership is legally binding documents which all the people involved agree to. It provides information on how the business operates and it states how profit and losses will be shared. It provides information on how much capital each partner contributed. Advantages of being a Partnership Disadvantages of being a Partnership Joint Investment Other partner/s might not compromise Business continues in unfortunate circumstances If you fall out then the business won’t go well More connections

You earn less money (share profits) More free time for owners Decisions take longer You share debts Conflict of interest Various ideas/personalities Partner might get greedy Company You might not want to compromise You divide working hours Unlimited Liability You can get out of debt quicker Disagreements Business Purposes The purpose of Ben & Jerry’s partnership is to make a profit from selling high quality ice creams, sundaes and drinks. They became a partnership because they were lifelong friends and they both wanted to do the same thing.

One of Ben ; Jerry purposes is to increase the amount of customers and they do this by giving out free ice creams once a year every year. Lots of people come to the shop for free ice cream and, Ben and Jerry hope, that they will like the ice cream so much that they will come back and PAY for the ice cream. Another purpose to increase the amount of sales- this is linked to increasing the number of customers but they also want their existing customers to buy more so they set lots of deals like buy 1 get one free etc.

One of their other purposes is to advertise their shop so they have their own website and they put up posters on buses and around the world, they also run adverts on TV. They have recently made some hot air balloons with the Ben and Jerry logo on them and one in the shape of an ice cream cone. This created a lot of publicity and increases their customer base. Another of their purposes is to make more profit so that they can increase the quality and the amount of flavours of the ice cream they produce . This in turn will increase the number of customers because the quality is better.

Another purpose is to be better than their competitors such as Magnum, Cornetto, Walls, and Tuttifrutti etc. The advantages of Ben and Jerry’s being a partnership is various ideas/personalities this means that if Ben had a business by himself then he wouldn’t have all the ideas for different flavours of ice cream, advertising ideas and ideas on how to run the business that Jerry would have had- basically the business has benefited from the ideas Jerry has had- which Ben couldn’t have had on his own. More connections are another advantage because Ben might know someone who might invest in them making drinks etc.

and Jerry might not have known this person. Another advantage is they divide working hours which is good because they feel less overworked and don’t feel pressurised etc because if they did the business might not run as smoothly as they want it to. The disadvantage of Ben and Jerry’s being a partnership is Conflict of interest this means that Ben might want to do something which might, in reality make a lot of profit but jerry doesn’t like it Ben might have to back down – and this causes the business to lose profit.

If Ben had been a sole trader he could have carried on with his plan and made a lot of profit. Another disadvantage is that they share profit which means that if Jerry wasn’t in a partnership he could be making double that amount of money he is now. This might cause disagreement between the two because Jerry might want to earn more money and Ben is getting in the way of him doing so. Size Ben and Jerry is a large business because they employ 2782738918 people.

They need this many employees because they have lots of stores worldwide and they have employees all over the world. They make lots of profit-their business is worth around 326 million. They also have lots of customers. Scale Ben and Jerry’s is a global business because they have shops all over the world and their products are in most superstores all over the world but they are mostly in the USA, Europe and Asia.

College of Business Administration Abstract: This research aims to gain the knowledge and awareness on the accounting practices done by small businesses. It aims to inform and learn about small businesses’ and their compliance to the standard practices of accounting in the Philippines, whether or not these businesses are following the basic accounting principles and what alternatives of accounting do they perform.

And lastly, to provide recommendations to the businesses owners and other persons involved, on what accounting practice is more suitable for small businesses. Through the use a variety of reference materials, such as reference books, text books and internet sources, information related to the study has been compiled and put together to form the appropriate knowledge needed for the study.

Through the findings, the researchers classified two types of accounting practices performed by small businesses: Formal Accounting, this accounting practice is based on the actual Philippine accounting standard provided by the IFRS, and a Semi-Formal Accounting, a combination of the IFRS accounting and the Single entry record system. Keywords: Accounting, Accounting Principles, Accounting Practices, Small Business, Small Business Accounting Introduction There are more than a million businesses spread throughout the Philippines.

From high rising commercial entities in the big cities, to the smallest businesses found in the front yard of residential homes in rural or urban areas. Business can be defined as a person, partnership, or corporation that seeks to provide goods and services to others at a profit (Dias and Shah, 2009) Businesses are among one of the factors affecting the economic growth in the country. Generally, taxes and investments earned by these businesses, through the purchases of their consumers, are paid to the Government. Small and medium-scale enterprises (SMEs) play a significant role in developing economies.

Among their contributions are as follows: (a) they address poverty by creating jobs and by increasing incomes; (b) they disperse economic activities in the countryside, and provide broad-based sources of growth; (c) they serve as suppliers and providers of support services for large enterprises; (d) they stimulate entrepreneurial skills among the populace; and (e) they act as incubators for developing domestic enterprises into large corporations. SMEs typically comprise the bulk of business enterprises in both developed and developing countries.

They also employ a large segment of a country’s workforce, and contribute significantly to national output (Habaradas, 2008) However, not all businesses contribute to the economic growth of the country especially for small independent businesses in private homes. Such examples are self-employed proprietors and street vendors whose businesses are not registered to the Bureau of Internal Revenue (BIR). Legally registered businesses (small businesses) on the other hand, contribute to the economic growth through payments of taxes collected by the Bureau of Internal Revenue.

Such businesses record transactions or accounting information to keep track and allocate assets, liabilities and the owner’s equity. Through this accounting information, the owners will be able to allocate their assets for the expenses of tax payments. It may be said that the accounting practice is for formalities and usually performed by large business entities. However it is important for small businesses to apply the accounting practices in order to easily keep track and record important transactions especially those which concern large amounts of money.

Accounting is important in achieving success in any business, especially a small one. Accounting is tied to the business’ financial well bing, without it, it will be hard to determine whether there is a positive or negative increase to the profit of the business. Accounting records must accurately reflect the changes occurring in the firm’s assets, liabilities, income, expenses and equity. The continued operation of a business depends on maintaining the proper balance among its investments, revenues, expenses and profit.

Because profit margins are so critical to the success of a business, any decline should trigger an immediate search for the cause. Thus, the owner must rely on the accounting information to search this cause (Byrd and Megginson, 2009) The purpose of a business is to make a profit; proper business accounting helps determine how well the business runs. Accounting is the general process of tracking income and expenses and then using that data to examine the financial status of a business. (Strauss, 2005) The accounting practices performed by larger businesses are usually formal, specific and detailed and done by certified accountants.

Small business accounting may be performed in various styles, with no formality and proper structure, and usually done by the owners themselves. A variety of accounting styles maybe derived from the informal accounting performed by small businesses. Some styles may have the same structure, making it similar to other businesses thus having slight uniformity. Review of Related Literature Small Businesses A small Business is any business that is independently owned and independently owned and operated, is not dominant in its field, and does not engage in many new or innovative practices.

It may never grow large, and the owners may not want it to, as they usually prefer a more relaxed and less aggressive approach to running the business. They manage their business in a normal way, expecting normal sales, profits, and growth. In other words, they seek a certain degree of freedom and ideally a certain degree of financial independence. (Byrd ;amp; Megginson, 2009) Accounting Accounting is a service activity; Its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decision.

Accounting includes several branches, for example, financial accounting, managerial accounting, and government accounting. This statement deals with financial accounting for business enterprises, the branch of accounting that focuses on the general-purpose reports on financial position and results of operations known as financial statements. This Statement has two broad purposes: (A) to provide a basis for enhanced understanding of the broad fundamentals of financial accounting, and (B) to provide a basis for guiding the future development of financial accounting. n. d. , 1998) Financial statements are prepared and presented for external users by many entities around the world. Although such financial statements may appear similar from country to country, there are differences which have probably been caused by a variety of social, economic and legal circumstances and by different countries having in mind the needs of different users of financial statements when setting national requirements.

The accounting conceptual framework, formerly known as the Framework for the Presentation of financial Statements by the IASC, serves as the foundation for the development of accounting standards by the International Accounting Standards board. It’s main objective is to narrow the differences in financial statements of different entities by harmonizing regulations, accounting standards and procedures relating to the preparation and presentation of financial statements. (Robles ;amp; Empleo, 2007) Structure of the Philippine Accounting

The Framework for the preparation and presentation of financial statements adopted in the Philippines is based on the International Accounting Standards Committee’s (IASC) Framework for the Preparation and presentation of Financial Statements. This was approved in the Philippines on January 26, 2000 by the unanimous vote of the members of the Accounting Standards Council (ASC). The ASC was the functioning accounting standard setting body in the Philippines, when the Philippines decided to adopt the International Accounting Standards.

The same Framework was upheld by the International Accounting Standards Board, when the latter succeeded the International Accounting Standards Committee in 2001. In the Philippines, the ASC was succeeded by the currently functioning Financial Reporting Standards Council (FRSC). The FRSC assists the Board of Accountancy in the latter’s function of adopting and promulgating the International Financial Reporting Standards. Thus, both the IASB and the locally functioning FRSC in the Philippines are guided by the same Framework. Robles ;amp; Empleo, 2007) The IFRS for SMEs The Philippine Institute for Public Accountants (PICPA) now recognizes the International Accounting Standards Board’s (IASB) recently released International Financial Reporting Standard for Small and Medium-Sized Entities (IFRS for SMEs), as an official set of accounting standards to be audited against. (Brozovsky, Christie & Hicks, 2010) The IFRS for SMEs was adopted in the Philippines effective January 1, 2010, and is known as the Philippine Financial Reporting Standards for Small-Medium Entities (PFRS for SMEs).

The Philippine Securities and Exchange Commission (SEC) adopted a definition of “small and medium-sized entities” that includes a size criterion. As defined by SEC, an entity is an SME if: it is not in the process of filing its financial statements for the purpose of issuing any class of instruments in a public market and, it is not a holder of a secondary license issued by a regulatory agency, such as bank (all types of banks), an investment house, a finance company, an insurance company, a securities broker / dealer, a mutual fund and a pre-need company.

The Philippines has been acknowledged by political scientists and economists as a newly industrialize nation. The country is experiencing rapid economic growth usually export-oriented and on-going industrialization. The Accounting Standards Council (ASC) is responsible for establishing and improving generally accepted accounting standards. Development of such standards are based on existing practices in the country, as well as statements and studies issued by other standard setting bodies like the International Accounting Standards Committee (IASC) and the Financial Accounting Standard Board (FASB).

The ASC, which was renamed as the Financial Reporting Standards Council (FRSC) decided to replace its US-based standards with International Accounting Standards (IAS), later referred to as IFRS. The Philippines also adopted the International Financial Reporting Standards in 2005. It modified its accounting practices slightly to adjust to Philippine policies making the Philippine Financial Reporting Standard (PFRS), and the Philippine Accounting Standards (PAS).

Businesses are fully aware of the changes from GAAP to IFRS, which now apply the new IFRS procedures, and modifications that were implemented taking effect in 2009. These companies are now preparing their financial statements in compliance with the PFRS. The Philippines has fully implemented the IFRS. In April 2010, The Philippines adopted IFRS for SMEs referred to as Philippine Financial Reporting Standard for SMEs. These standards can be used by an entity that is not a listed company, a large unlisted company, and a financial institution or public utility. (Ibarra & Suez-Sales, 2011)

The International Accounting Standards Board ( IASB ) was established in 2001 as part of the International Accounting Standards Committee ( IASC ) Foundation. One of the objectives of the IASC foundation and of the IASB is: to develop, in the public interest, a single set of high quality, understandable and enforceable global accounting standards that are require high quality, transparent and comparable information in financial statements and other financial reporting to help participants in the world’s capital markets and other users make economic decisions.

The IASB also develops and publishes a separate standard intended to apply to the general purpose and other financial statements of, and other financial reporting by, entities that in many countries are referred to by a variety of terms, including small and medium-sized entities (SMEs), private entities, and non-publicly accountable entities. That standard is the International Financial Reporting Standards for Small and Medium-sized Entities (IFRS for SMEs).

SMEs often produce financial statements only for the use of tax authorities or other governmental authorities. Financial statements produced solely for those purposes are not necessarily general purpose financial statements. (Alliance of Accounting and Auditing Researchers, n. d. ) Accounting Policies The IFRS for SMEs is indented for the use of small and medium sized entities (SMEs). Small and medium-sized entities are entities that do not have public accountability, and publish general purpose financial statements for external users.

Examples of external users include owners who are not involved in managing the business, existing and potential creditors and credit rating agencies. Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements. If this IFRS specially addresses a transaction, other event or condition, an entity shall apply this IFRS. However, the entity need not to follow a requirement in this IFRS in the effect of doing so would not be material.

If this IFRS specifically address a transaction, other event or condition, an entity’s management shall use its judgement in developing and applying an accounting policy that results in information that is relevant to the economic decision-making needs of users, and reliable, in that the financial statements represent faithfully the financial position, financial performance and cash flow of the entity; reflect the economic substance of transactions, other events and conditions, and not merely the legal form; are neutral, i. . free from bias; are prudent; and are complete in all materials respects. An entity shall select and apply its accounting policies consistently for similar transactions, other events and conditions, unless this IFRS specifically requires or permits categorisation of items for which different policies may be appropriate. If this IFRS requires or permits such categorisation, an appropriate accounting policy shall be selected and applied consistently to each category.

An entity shall change an accounting policy only if the change is required by changes to this IFRS, or results in the financial statements providing reliable and more relevant information about the effects or transactions, other events or conditions on the entity’s financial position, financial performance or cash flows. (Alliance of Accounting and Auditing Researchers, n. d. ) Need of Accounting Information for Small Businesses In order to operate a business effectively, the owner should be informed as to the nature and amount of each asset, each liability, and the amount of owner’s equity.

For purposes of planning and controlling business operations, the owner should also know when, why and how frequently changes occurs in the various assets, liabilities and the owner’s equity of the business. Without written records, business owners are not able to keep track of the nature and the amount of the assets, liabilities, and owner’s equity and the changes that occur in their composition. A good record keeping system is usually essential to provide the necessary information.

This system of record keeping should show the effect of each transaction on the assets, liabilities and owner’s equity of the business. (Taylor, 2003) Proper Business Records There are several reasons (and advantages) for keeping good business records, and many of them are a real a real advantage: (1) to show financial standings, (2) to help make important financial decisions, (3) to help control VAT – collecting it in and paying it out, (4) to help audit in certain cases, and keep the auditing costs down, (5) to discuss your financial position with other people.

Unless the owners decide otherwise, there is no legal need for an annual audit of the records of a sole trader or a partnership. There is, however, a legal obligation for an annual audit of the accounts of most limited companies. There will be some expenses which are partly for business and partly for private purposes. Recording of business transactions also depends on the size of the business. There can be no hard and fast categories for size of a business. But obviously a national chain store will have a more sophisticated accounting system than a local trader with a market stall.

The point at which more complicated records needed, will also depend partly on the type of trade. There are three types of entity commonly found running a business. These are: Sole traders, Partnerships and Limited Companies. Sole traders are persons owning the business which he is running in his own right. Since the person is trading in his own right he is personally responsible for any debts his business incurs. Partnerships are groups of people owning and running the business. It is the individuals in the partnership who are responsible for the partnership debts.

Limited Companies are businesses which are owned by at least two people who may or may not also be involved in the day-to-day running of the business. The owners have a limited personal liability for the debts incurred by the company which is a separate legal ‘person’ or entity. The day-to-day running of a limited company is entrusted to its directors. The directors of a company may also be the shareholders. (Taylor, 2003) Businesses can also be classified into three broad categories: public companies, private companies, and small businesses.

The distinction between the latter two is the size of the company. Though small, these businesses are important in the aggregate as the major creator of new jobs. Small businesses also constitute a major source of clients for local and regional CPA firms. The need for accounting reports varies among the three classes of businesses. Accounting reports are used to comply with various government reporting requirements. Primary among these is the need to report a business’s income, personal property, and payroll to the necessary tax authorities.

The relative importance of different uses of accounting reports varies with the size of the business. (Brozovsky, Christie ;amp; Hicks, 2010) Accounting Principles and Practices Most businesses typically use one of two basic accounting methods in their bookkeeping systems: cash basis and accrual basis. While most businesses use the accrual basis, the most appropriate method for a company depends on the sales volume, whether or not you sell on credit, and your business structure. The cash method is the most simple in that the books are kept based on the actual flow of cash in and out of the business.

Income is recorded when it is received, and expenses are reported when they are actually paid. The cash method is used by many sole proprietors and businesses with no inventory. From a tax standpoint, it is sometimes advantageous for a new business to use the cash method of accounting. That way, recording income can be put off until the next tax year, while expenses are counted right away. With the accrual method, income and expenses are recorded as they occur, regardless of whether or not cash has actually changed hands. An excellent example is a sale on credit.

The sale is entered into the books when the invoice is generated rather than when the cash is collected. Likewise, an expense occurs when materials are ordered or when a workday has been logged in by an employee, not when the check is actually written. The downside of this method is that payment of income taxes on revenue are made before actually receiving it. The accrual method is required if annual sales exceed $5 million and the venture is structured as a corporation. In addition, businesses with inventory must also use this method.

It also is highly recommended for any business that sells on credit, as it more accurately matches income and expenses during a given time period. The cash method may be appropriate for a small, cash-based business or a small service company. (Leonsky, 1998) Accounting is the general process of tracking your income and expenses and then using that data to examine the financial status of your business. The basic accounting tool is the general ledger. It is the place where you keep track of all the business’ financial transactions.

That information is then used to create financial statements such as balance sheets and income statements. (Strauss, 2007) An accounting system structures the flow of financial information to provide a complete picture of a firm’s financial activities. There are two types of accounting systems performed by small businesses: (1) the single-entry system and (2) the double-entry system. The single-entry record-keeping system is occasionally still found in the very small business. It is not, however, a system recommended for firms that are striving to grow and achieve effective financial planning.

A single entry-system neither incorporates a balance sheet nor directly generates and income statement. A single-entry system is a check book system of accounting reflecting only receipts and disbursements. A double-entry system is a type of accounting system that provides a self-balancing mechanism in the form of two counterbalancing entries for each transaction recorded. It can be done with the record-keeping journals and ledgers found in most office supply retail stores. However, the relatively simple accounting software programs designed for small firms are preferable. Longenecker, 2006) Conclusion Based on the information gathered by the researchers, the researchers have come up with a conclusion to the stated problem. The researcher has classified two types of accounting practice/principles performed by small businesses namely: Formal Accounting and Semi-Formal Accounting. Formal Accounting practice are based on the standards of the International Financial Reporting Standard for Small and Medium-Sized Entities (IFRS for SMEs) The IFRS for SMEs is indented for the use of small and medium sized entities (SMEs).

Small and medium-sized entities are entities that are defined as not having public accountability, and do not publish general purpose financial statements for external users. The Semi-Formal Accounting practice is a combination of the Formal Accounting Practice (based on the IFRS for SMEs), and the Single-entry record keeping or booking keeping system. In the Single-Entry system, mostly performed by small businesses, business owners record only the most important or essential transactions for the business which usually contain only the following: cash, accounts receivable, accounts payable and taxes.

However, by performing this system, the owners still apply some of the standards given by the IFRS for SMEs. Most businesses however, perform only the Single-entry system. It is a much easier and convenient accounting practice that is preferable by the owners of small businesses because of its comprehensiveness in storing only the important accounting information needed by such businesses. Recommendation The Single-entry system, for most business owners, is mostly performed for its convenience and completeness. The researcher recommends, however, for the owners to apply the Formal accounting practice.

The IFRS for SMEs, established by the IASB, was made specifically for small businesses to use. This accounting standard is best recommended for small businesses to attain uniformity among all other businesses alike. This will not only provide advantage to the owners but also to the users of the accounting information. It is still reminded that smaller businesses; such as vendors, sari-sari stores, restaurants or eateries; are not recommended to perform such complicated accounting practice but, they are still advised to record accounting information.

The recommended accounting practice for such businesses is the Single-entry system. The researchers provide further recommendations toward the persons involved: 1. To the Business Owners of small businesses, they must obey and follow the accounting standards of the International Financial Reporting Standard for Small-Medium Entities (IFRS for SMEs), mentioned in this research, to attain uniformity among other small businesses which practice the accounting standard of the IFRS. 2.

To the College of Business Administration and its faculty members, in which they can use this research as an instructional material or instrument in teaching their students about topics relating to the research. 3. To the Graduates of the College of Business Administration, who plans to have their own business or put up a small business; that this research may serve as a reference and as a guide for their first steps in being entrepreneurs. 4. To the Students of the College of Business Administration, in which they can use this research as a reference material to their academic studies.

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