1.2 Types of Business Organisations Flashcards
Sole Trader Advantage
Full control
Easy to setup
You get to be your own boss
Sole Trader Disadvantage
Unlimited liability
Unincorporated
Long hours
Lack of finance
Partnership Def
Equal Pay
Deed of partners
Partnership Examples
Paul Allen and Bill Gates,
Steve Jobs and Steve Wozniak
Sole Trader Example
Wedding Planner
Partnership Advantages
Share decision making process (new ideas, share the work),
More capital
Partnership Disadvantages
Unlimited liability,
Unincorporated,
Lack of agreement
Types of partnerships
General Partnership
Limited Partnership
Joint Ventures (specific period of time)
Deed of Partners determine how
Decisions will be made
Profits will be distributed,
Disputes will be solved
Limited Companies Adv
incorporated,
limited liability,
easy to raise finance,
stable form of structure
Limited Companies Disadv
greater admin costs,
public disclosure of company information,
Private LC Examples
Amazon,
Toyota,
Samsung,
IKEA
Public LC Examples
Sainsbury,
Marks and Spencer,
EasyJet
Cooperatives Adv
No conflict between owners and workers
Cooperatives Disadv
Limited sources of finance (retained profits, owners capital)
a group of people acting together to meet the common needs and aspirations of its members, sharing ownership and making decisions democratically
Cooperatives Def
There are 2 types (for profit): Producers and Retailers.
They are run by a board of directors
Producers Def
Producers: owners are the workers (ownership and control)
Retailers
Owners are the customers (eg. Banks)
Public Corporations
Owned and funded by the government
Public Private Partnership (PPP)
Involvement of the private sector in the form of management expertise and/or financial investment in public sector projects in aim of benefiting the public.
How to choose ownership structure
The industrial sector Size Revenues Number of workers Needs of finance (most important!)
