Types of Businesses Flashcards
A business owned and operated by 2 to 20 partners
Partnership
A business which has at least 5 members with shared management and equal voting rights. It is a separate legal entity
Cooperative
-Established reputation, products or service and store layout
-Advertising and marketing support
-Franchisor provides training
Franchise
A business owned and operated by 1 person
Sole Trader
A business which has a separate legal entity form its shareholders. A public company has a minimum of 1 shareholder. A propriety (private) company has 1-50 partners
Company
A business or person (franchisee) buys the right to use the name, products and services of an existing business (franchisor)
Franchise
-Unlimited liability
-Profits must be shared
-Disputes between partners
-Ceases if a partner dies, leaves or retires
Partnership
-Limited liability
-Can raise lots of money through shareholders
-Unlimited life-Change in shareholders doesn’t cease the business
-Run by board of directors not shareholders
Company
This business liability depends on if it is set up as a sole trader, partnership or company
Franchise
-Minimum of 5 shareholders
-Little to no profit distributed to members
-Only one vote for each member
-Ongoing education for members
Cooperative
Unlimited liability-the owner is personally responsible for their business debts. Their personal assets may need to be sold to meet outstanding business debts.
Sole Trader/Partnership
Limited liability-shareholders are limited to the value of their shares for any business debts. No personal assets can be sld.
Company
-Expensive to set up and operate
-Complex reporting requirements
Company
-Simplest and cheapest to establish
-Owner has complete control over all decisions
-Owner keeps all profit
-Fewer government repoting required
Sole Trader
-Simple and inexpensive to set up
-Partners bring more money and skills
-Shares of losses
Partnership
