Types of ownership Flashcards
what are Sole traders
When a business is owned by a sole proprietor
What are the advantages of being a sole trader
They have full control over how the business operates
They receive 100% of profits generated by the business
What are the disadvantages of being a sole trader
Suffer from unlimited liability
They are solely reliable for all debts generated by the business and unlimited liability also means that owners may be charged personal property for outstanding business debts
What are Private limited companies (LTD)
Different shareholders buy share of the business privately and run the organisation
What are the advantages of being a LTD
New shareholders bring new skills and ideas
Extra finance
Protected by limited liability only responsible for the debts generated by the business and can only loose what has been invested in the business
What are the drawbacks of a LTD
Potential for power struggles alongside conflicting interests
What is a public limited company (PLC)
A business where shares and therefore owner rights are sold and traded on the stock exchange
Advantages of operating as a (PLC)
Very limited control on who becomes
