Types Of Businesses Flashcards
What is a Sole Trader
A company that is owned and controlled by a single person
What are the Advantages of being a Sole Trader
Quick and easy to set up
Business can be transferred to a limited company once set up
Simple to run - owner has complete control over decision making
Lower accounting fees and greater privacy
No sharing of profit (apart from tax)
What are the disadvantages of Sole Traders
Unlimited liability
Sole responsibility
Fewer tax planning opportunities
Barriers to finance
Sale limitations
What is a Private Limited Company
A company which is privately owned/held, however has limited liability
What are the Advantages of a limited company
Limited liability - shareholders are protected
Higher take home pay
Separate legal entity to the owner
Better credibility and professionalism
Easier access to capital
What are the disadvantages of a limited company
High accountant costs - accounting requirements
Public records
Regulatory requirements
Financial reporting
Regulatory compliance
What is a public limited company
Advantages of a public limited company
Disadvantages of a public limited company
Very expensive to set up with more complex accounting
Reporting requirements
What is a Primary Business?
Any business that grows goods or extracts minerals
What is a Secondary business?
A business that manufactures a product farmed from a Primary business
What is a Tetiary Business?
A business which provides a service/goods
What is a Quaternaty Business?
A business concerned with providing information about a product/service
What is a B2C business?
A “Business to Customer” Business
What is a B2B business?
A “Business to Business” business
