Types of Buisnesses Flashcards
UNLIMITED LIABILITY-The owner is personally responsible for buisness debts. their personalassets may need to be sold to meet outstanding buisness debts
sole trader liability of owner
-simplest and cheapest to establish
-owner has controll over all decisions
-owner keeps all profit
-fewer government reporting requirements
sole trader advantages
-unlimited liability
-owner suffers all losses
-dificult to take holidays or leave
sole trader disadvantages
-simple and inexpensive to set up
-partners bring more money and skills
-share of losses
partnership advantages
-unlimited liability of owner
-profits must be shared
-disputes between partnerships
-ceases if a partner leaves, or retires
partnership disadvantages
-establish reputation, products or service and store layout
-advertising and market support
-franchiser provides training
franchise advantages
UNLIMITED LIABILITY-the partners are joined responsible for buisness debts. their personal assets may need to be sold to meet outstanding buisness debts.
liability of owner partnership
a buisness which has a seperate legal entity from its shareholders. A public company has a minimum of 1 shareholder. A propriety (private) company has 1-50.
company description
a buisness owned and operated by 2-20 partners
partnership description
-limited liability
-can raise lots of money through shareholders
-unlimited life change in shareholders doesnt cease buisness
-run by a board of directors not the shareholders
advantages company
-franciser controls decisions made and operations
-paying ongoing fees to the franchiser
-profit must be shared with the franchiser
franchise disadvantages
a buisness or person (franchise) buys the right to use the name, product and services of an existing buisness (frachiser).
franchise description
A Buisness owned and operated by one person
sole trader description
Limited liability- shareholders are limited to the value of their shares for any buisness debts. No personal assets can be sold
liability of owners company
-minimum of 5 shareholders
-little or no profit distributed to members
-only one vote each member on going
-education for members
disadvantages cooperative