INTO BUSINESS

TRADE AND COMMERCE

TRADE: the buying and selling of goods and services.

				FOREIGN TRADE The buying and selling of goods between 2 different countries

COMMERCE: is a more general term, it is used to describe trade and all the other business activities and services which make trade possible.

THE CHANNELS OF DISTRIBUTION

THE BUSINESS TRANSACTION

For a business transaction to take place, the buyer and the seller must agree on a contract of sale. The seller undertakes to supply a certain number of goods or services at an agreed quality and price and within a specified time limit. The buyer promises to pay an agreed amount for the goods or services by a certain time.

These are the basic factors or sales terms governing a contract of sale, but the two parties must agree on other sales terms such as means of transport, means of payment, packing, insurance, delivery and documentation.

TYPES OF BUSINESS UNITS

	SOLE TRADER (=DITTA INDIVIDUALE) Unlimited liability (=responsabilità illimitata) This is the simplest type of business. The term sole trader means that the business is set up by one person who is entirely responsible for his own business debts. The advantages of a sole trader are: The owner can monitor everything personally; The owner receives all the profits; The owner can make decisions quickly. The disadvantages are: Unlimited liability means that the owner can lose all his personal assets if the business fails; There are limited resources of finance because all capital must be provided by one person; There is no one to share the workload or ideas with.
	PATNERSHIP (=SOCIETA) A partnership is formed when two or more people set up a business together. There are two types of partnership. a)     Unlimited partnership (S.n.c.). In this type of partnership, all of the partners are liable for the debts of any of the other partners. b)     Limited partnership (S.a.s.) In this type of partnership, some partners only contribute capital to the business, and do not take an active role in management.
	LIMITED COMPANIES A limited company is formed by a minimum of two shareholders, that is to say investors who have shares in the company. There are two types of limited company: a)     Private limited company (S.r.l.) They must have "Ltd" after their name; They cannot be quoted on the Stock Exchange; Their shares can only be sold with the agreement of all the shareholders. b)     Public limited company (S.p.A.) They must have "Plc" after their name; They can be quoted on the Stock Exchange; They shares can be sold with no restrictions.