Types of 🅱️usinesses Flashcards
A 🅱️usiness owned and operated by 1 person
Sole trader
A 🅱️usiness owned and operated by 2-20 partners
Partnership
A 🅱️usiness which has a separate legal entity from its shareholders
Company
A 🅱️usiness or person buys the right to use the name, products and services of an existing 🅱️usiness
Franchise
A 🅱️usiness which has at least 5 members with shared management and equal voting rights
Cooperative
The owner is personally responsible for 🅱️usiness debts
Sole Trader - Unlimited Liability
The partners are jointly responsible for 🅱️usiness debts
Partnership - Unlimited Liability
Shareholders are limited to the value of their shares for any 🅱️usiness debts
Company - Limeted Liability
Dependes on if the 🅱️usiness is set up a certain way
Franchise
members are limitaed to the value of their investments for 🅱️usiness debts
Company - Limited Liability
☆ Simplest and cheapest to own
☆ Owner has control over all decisions
☆ Owner keeps all profit
☆ Fewer government reporting
requirements
Sole Trader - Advantages
☆ Simple and inexpensive to set up
☆ Partners bring more money and skill
☆ Share of losses
Partnership - Advantages
☆ Limited Liability
☆ Can raise lots of money through
shareholders
☆ Unlimited life - change in shareholders
dosen’t decrease 🅱️usiness
☆ Run by board of directors
Company - Advantages
☆ Established reputation, products and
more
☆ Advertising and marketing support
Franchise - A
- Franchisor controls decisions and operations
- Paying ongoing fees to the franchisor.
- Profit must be shared with franchisor
Franchise - Disadvantages
