Types of businesses Flashcards
simplest, cheapest to establish.
sole trader advantages
limited liability, limited to the value of the investment
cooperative
profit must be shared. ceases if partner dies, leaves or retires.
partnership disadvantages
the partners are jointly responsible for business debt. unlimited liability
partnership
A business or person buys the right to use the name, product and services for an existing business
franchise
owner suffers all losses
sole trader disadvantages
A business with a minimum of 1 shareholder.
company
A business owned and operated by 1 person
Sole trader
can raise lots of money through shareholders
company advantages
inexpensive, no minimum age limits
cooperative advantages
little to no profit, minimum of 5 members needed
cooperative disadvantages
expensive to set up, and complex reporting requirements.
company disadvantages
the liability depends on the franchise set up.
franchise
owner is personally responsible for business debt. unlimited liability
Sole trader
A business owned or operated by 2 to 20 partners
partnership
paying ongoing fees, profit must be shared.
franchises disadvantages
limited liability, no personal assets can be sold
company
established reputation, advertising is already set up.
franchise advantages
a business with at least 5 members, shared management, equal voting rights
cooperative
simple and inexpensive to set up. Partners bring more money and skills. must share the losses
partnership advantages
