Types Of Businesses Flashcards
What are the advantages of a sole trader
Easy to set up
Small capital investments means small start up costs
Freedom to make decisions.
What are the disadvantages of a sole trader
Respinsibility
Long hours
Unlimited liability
What is a partnership
Businesses owned by two or more people
What are the advantages of a partnership
Someone to consult on business decisions
Shared expertise
What are the disadvantages of a partnership
Shared responsibility
Disputes can arise by decisions being made
Unlimited liability
What are the two main types of limited company
Private
Public
What is a sole trader
Someone who runs and manages a business all by theme selves
What are features of a private limited company
Closely held businesses usually by family and friends
Can sell shares but only to friends not on stock exchange
What are the advantages of a private limited company
Limited liability
Only 2 shareholders to start s business
More capital can be raised as number of shareholder can be 50
What are Re the disadvantages of a private limited company
Growth may be limited as only 50 shareholders
Shares can not be sold or transferred
Features of a public limited company
Can sell shares on stock exchange
Advantages of public company
Limited liability for share holders
Have sepereated legal identity
Raise large capital
Shares are freely transferable
Disadvantages of a public limited company
Lot of legal formalities
Original owners may lose control
Can face management problems
