Business Ownership Structures

Question 1

What are the three types of ownership

Answer 1

Sole trader
Partnership
Private limited companies

Question 2

Advantages to a sole trader

Answer 2

Easy to set up
Be your own boss
Decide what happens with profit

Question 3

Disadvantages to a sole trader

Answer 3

Long hours
Few holidays
Unlimited liability - personal belongings taken

Question 4

Advantages to a partnership

Answer 4

More ideas
Shared workload
More capital into business

Question 5

Disadvantages to a partnership

Answer 5

Each partner legally responsible for other partners
Unlimited liability - personal belongings taken
More disagreements

Question 6

Limited companies - differences to other types of companies

Answer 6

Limited liability - not personal belongings
Memorandum of association - who and where the business is
Article of association - how the business will be run
Owned by shareholders - more shares, more control

Question 7

Advantages to private limited companies

Answer 7

Limited liability - can’t lose more than you invest

Question 8

Disadvantages to private limited companies

Answer 8

More expensive - legal paperwork

Legally obliged to publish accounts every year

Question 9

What do limited liabilities have to do

Answer 9

Own money and property
Make contracts
take legal action 
Pay tax
If the can't pay money back - company in trouble not owners
Publish accounts
Stakeholders