understanding different business forms Flashcards
1
Q
types of businesses
A
- sole trader
- partnership
- private limited company (ltd)
- public limited company (plc)
- private sector
- public sector
- non-profit organisations
2
Q
advantages of sole trader
A
- owned and run by individual
- work for yourself (keep all profits)
- quick and easy to start up
3
Q
disadvantages of sole trader
A
- unincorporated
- unlimited liability
4
Q
what is unlimited liability
A
personal assets can be seized if in debts
5
Q
what liability does a partnership have
A
unlimited liability
6
Q
advantages private limited company
A
- owner and business separate in eyes of the law
- limited liability
- shares sold have to be agreed
7
Q
disadvantages private limited company
A
- shares cannot be sold of the stock market
- accounts have to be published
- less control
- have to pay out dividend (% of profits)
8
Q
advantages of public limited company
A
- sell shares on stock exchange - (easy to raise finance)
- easier to get bank loans
9
Q
disadvantages of public limited company
A
- have to pay dividend
- can loose control
10
Q
what is public sector organisation
A
- owned and run by government
- main objective = provide a service
- gets finance from taxes
11
Q
what are private sector organisations
A
- owned and run by private individuals
- main objective = maximise sales and profit
12
Q
what are non-profit organisations
A
- charities
- established for particular social, community, environmental, welfare or cultural aims
13
Q
what is ordinary share capital
A
funds raised by company through shares
