legal status Flashcards
what is a partnership
A partnership business consists of two or more people who combine their resources to form a business and agreed to share risks profit and losses.
what are some strengths of a partnership
Strength 👍 • Two heads are better than one • Your business is easy to establish and stars because are low • More capital is available for business • Bank are more likely to lend you money
what are some weakness of partnerships
Weakness 👎
• unlimited liability
• Each partner is liable for the partnerships debts; that is, each partner is
liable for their share of the partnership depts as well as being liable for all the debts
what is a A Private limited company
A Private limited company is any type of business entity in “Private” ownership it can’t sell she’s to the public like on the stock exchange but they can sell them to friends and family
what are some strengths of a A Private limited company
Strength 👍
• Owner can retain control
• More able to raise money
• Limited liability
what are some weakness of a A Private limited company
Weakness 👎
• Must be registered with the registrar of companies
• High setup costs(legal and administrative)
• Harder to motivate and control workers
what is a Public limited company
Shares can be sold to the general public via stock exchange
what are some strengths of a Public limited company
Strength 👍
Shares have limited liability
• They have separate corporate identity so the shareholders are not responsible for the actions of the company
• The business has continuity so if shareholders sell their shezinger business will not end
• They will house more capital vents unlimited liable businesses as they can sell shares
what are some weakness of a Public limited company
Weakness 👎
• May be expensive and difficult to organise as a range of documents and needed to insurance the business is properly and legally set up
• Profits i shared with shareholders the payment is known as a dividend
• Capital maybe limited as money cannot be raised from investors on the stock exchange
what is a Sole trader
A sole trader is an individual you set up a business on his or her own
what are some strengths of a Sole trader
Strength 👍
• Eazy and cheap to set up
• All profits a kept by the owner
• Affairs can also be kept private so there is no need to publish account
• The sole trader will often have a good relationship with customers and employees
what are some weakness of a Sole trader
Weakness 👎
• Owner has a limited liability
• There’s no continuity so if the ST leaves the business it will come to an end
• Limited capital when the business is being set up and is in operation
• The workload and responsibilities of owning and running a business can be great
what is a Co-operative
Cooperatives arebusinesses owned by “member-owners”. Co-ops are democratically controlled by their member-owners, and unlike a traditional business each member gets a voice in how the business is run. Services or goods provided by the co-op benefit and serve the member owners
what are some strengths of a Co-operative
Strength 👍
• Members feel they have a real impact in the running of the business.
• Less focus on profit - leads to better customer service and emphasis on ethical business practices.
• Profits distributed fairly among members.
• Members more motivated to succeed - enjoy working together and get great job satisfaction
• Less likelihood of arguments - members share the same aims and objectives.
• Committed to the training and education of their employees.
what are some weakness of a Co-operative
Weakness 👎
• Decision making takes a long time - everybody has a say in the running of the business.
• May be hard for members to make tough decisions that will affect their co-workers, such as job cuts – they are not trained.
• Focus on fairness and ethical business practice may limit opportunities for growth and maximising profit.
• Find it difficult to recruit top quality management - most able candidates usually demand a high salary.
