Business Structures Flashcards
What are two advantages of a Sole Trader?
Easy / cheap to set up
No registration or documentation is required
What are two advantages of a Partnership?
No registration is required.
Expertise is shared.
What are two advantages of a Company?
More credibility in the marketplace.
Easier to attract funds and investments.
What are two disadvantages of a Sole Trader?
Harder to sell the business.
Harder to attract loans and investments.
What are two disadvantages of a Partnership?
Putting personal assets at risk.
Possible partnership conflicts
What are two disadvantages of a Company?
directors need to clearly understand their responsibilities
Control is divided or shared.
What is unlimited liability?
If the business fails the personal assets of the owner can be used to repay business debts.
What is limited liability?
If the business fails the personal assets of the owner cannot be used to repay business debts.
