Appropriatness of different forms of businesses

Question 1

what are the 8 factors which affect the appropriateness of different forms of businesses

Answer 1

Growth
Size
The need for finance
Control
Limited Liability
Type of business activity
Plan to use profit
stakeholders

Question 2

how can growth affect the legal form a business takes

Answer 2

as business grow and get better, due to the profit incentives and other factors a business may turn from a sole trader to a private ltd in order to raise more money, similary a private ltd may become a public ltd

Question 3

how can size affect the form a business takes

Answer 3

it can be argued that a big partnership or large companies can only be run as private limiteds

Question 4

how can the type of business activity affect the legal form a business can take

Answer 4

small business that provide one man services such as plumbing or garderning can take the form of a sole trader, whereas accountancy firms or other medium sized firms may function as partnerships because of the range of expertise needed, family businesses may be private ltds and large banks maybe be PLCs

Question 5

how can the type of business affect the objectives of a business

Answer 5

sole traders may not want to take lots of responsibility or may not have the skills to manage a large firm, so they will remain as sole traders or they may just want enougn financial security, not a lot of work
family business may not want to lose control to outsiders so they may remain as private limited companies
most multinationals howver want to grow so they may open many outlets in a region, reinvesting most profits