legal structures Flashcards
sole trader
A sole trader is a self-employed person who owns and runs the business on there own.
advantages-you keep all the profits, you make all the decisions, start up costs are low and you feel have personal satisfaction a it can be quite difficult to start up and expand a business.
disadvantages-no one to share ideas with, poor work life balance (no flexibility), liable for anything that goes wrong, it is hard to start up and expand the bussiness
partnership
two or more people that run a business
A-somebody to share ideas with, flexible work, tax benefits, not as much work
d-share profits, do not get final decisions, you will have disagreements and increased liability.
company
a business organization which makes goods and services to sell to the public for profit.
A-shareholders can be employed, you can trade anywhere in Australia
D-can be expensive to start up, if director fails to meet legal obligations they may be help liable for the company’s debts
Public company
a public company is a business that is owned by shareholder and is publicly listed on the stock market meaning shares can be bought or sold.
A-access to more shareholders which means they can expand there business more quickly, there is more directors typically in a public business meaning more ideas and skills can be brought to the business. The tax rate of the company would be less the marginal rate and there is limited liability for the owners.
D-There is a lot of regulatory requirements you must obey and if you don’t you will be liable meaning you will have to pay of the debt.
You can get criticized from the media and stakeholder for the cost of share beings to high ect
fluctuations in stock market meaning people may not be interested in buying shares so no money will come in.
