types of organisations- UB Flashcards
name the 6 most common types of business ownership in the private sector.
sole trader, partnership, a private limited company, public limited company, multinational and franchise.
what is a sole trader?
where one person owns and controls a business
what is a partnership?
where between 2 and 20 people own and control a business.
what is a public limited company?
a company where shares are available to the public.
what is multinational?
a company that has its headquarters in a separate country from where their products are made.
what is a franchise?
buying into an already established business.
give 2 advantages to a sole trader.
get to keep all profits for themselves and is legally the easiest to set up as it has fewer rules and regulations
give 2 disadvantages to a sole trader.
can be difficult to raise finance and a harder workload.
give 2 advantages to a partnership.
can share the workload and different partners can bring different types of skills.
give 2 disadvantages to a partnership.
profit is shared between the partners and partners may not always agree on decisions for the company.
give 2 advantages to a private limited company.
the owner can retain control and able to raise more money.
give 2 disadvantages to a private limited company.
hard to motivate and control workers and high set up costs (legal and administrative)
give 2 advantages to a public limited company.
easier to grow and diversify and raise more money by selling shares on the stock exchange.
give 2 disadvantages to a public limited company.
disagreement on how to run the company and threat of takeover.
give 2 advantages of a multinational organisation.
creates jobs boosting the local economy and benefiting from economies of scale.
