Types of Businesses Flashcards
franchisor controls decisions and operations
paying ongoing fees
profit must be shared with franchisor
franchise disadvantages
unlimited liability
profits must be shared
ceases if a partner leaves
partnership disadvantages
expensive
complex reporting requirements
company disadvantages
inexpensive to register
equal voting rights
limited liability
no minimum age limit
cooperative advantages
A business owned by 2 to 20 partners
Partnership
Unlimited liability
Owner suffers all losses
Difficult to take holidays
Sole trader disadvantages
limited liability
members are limited to the value of their investments
cooperative
simple and inexpensive
partners bring more money
share of losses
Partnership advantages
a business that has separate legal entity from its share holders. a public company
company
What is a business owned by 1 person
Sole trader
limited liability
can raise a lot of money
run by board
company advantages
Unlimited liability
Partners are jointly responsible for business debts
personal assets may need to be sold
Partnership
Cheapest to establish
Owner has control over decisions
Fewer government reporting requirements
Sole trader advantages
depends on if the franchise is set up as a sole trader
franchise
