1.5 Forms of Business Flashcards
How many people own a sole trader business?
One
How many people own a partnership business?
2-20
Which forms of ownership has limited liability
LTD and PLC
How many people own a LTD/ PLC business?
Any amount
Which forms of ownership has unlimited liability
Sole trader and Partnership
An advantage of being a sole trader:
The owner has complete control over the business including all profits.
A disadvantage of being a sole trader:
Unlimited liability and limited access to finance and capital.
An advantage of being a partnership:
Shared responsibilities and decision making.
More skills and more knowledge.
A disadvantage of being a partnership:
Unlimited liability.
Potential for disputes between partners.
An advantage of being an Ltd:
Limited liability.
Access to greater finance and capital.
A disadvantage of being an Ltd:
More complex legal requirements and regulations and sole traders.
Annual financial reporting and auditing are required.
An advantage of being a PLC
Greater access to finance and capital.
Shared risks.
Greater public profile.
Limited Liability.
A disadvantage of being a PLC
Make experience communication difficulties due to size.
May not always raise a significant amount of finance.
Have to publish financial accounts.
What is an example of a sole trader.
Plumbers, electricians.
What is an example of a partnership
Lawyers, vets, dentists.
