Types Of Business Organisations Flashcards
What is a sole trader?
a type of enterprise owned and run by one person and in which there is no legal distinction between the owner and the business entity
What is unlimited liability?
When a business owner is personally responsible for any business debts
What type of organisation have unlimited liabilities?
Sole traders and partnerships
What is Limited liability
When a business has its own legal status separate from that of the owners
What sort of organisations have limited liability
Private limited companies and public limited company
What is a partnership
where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations.
What Is a private limited company
private limited company does not publicly trade shares and is limited to a maximum of 50 shareholders.
legally distinct entities with their own assets, profits and liabilities.
What are Public limited companies
Companies that raise finance by selling stocks to the public
business that is managed by directors and owned by shareholders.
What are the benefits of being a sole trader?
Get started immediately
Complete control
Less paperwork
Few fixed overheads
Are the negatives of being a sole trader
Unlimited liability
large workload
Limited access to finance

What are the positives of a partnership
Another partner to introduce capital
Spread of costs to business
More specialisation
Spread of workload
May have good I was on how to improve the business
What are the negatives of being in a partnership
Liabilities. In addition to sharing profits and assets, a partnership also entails sharing any business losses, as well as responsibility for any debts, even if they are incurred by the other partner. …
Loss of Autonomy. …
Emotional Issues. …
Future Selling Complications. …
Lack of Stability.
What are the positives of being a private limited company?
Limited Liability.
Tax Efficient.
Easier To Raise Capital.
What are the negatives of being a private limited company
Many legal matters during set up.
Shares cannot be sold on stock exchange.
Capital limited to share holders.
Accounts made public.
What are the positives of a public limited company
business has the ability to raise additional finance through share capital
shareholders have limited liability
