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Form of business
Different form of business
| Question | Answer |
|---|---|
| Sole Trader Advantages | - Keep all the money - Free to make own decision - Easy to set up |
| Sole Trader Disadvantages | - May make wrong decision, nobody to consult with - Lack of start up capital - Responsible for the debts of the business(unlimited liability) - Too much workload, have to be an expert on everything. |
| Partnership Advantages | - Different partners will have have different skills - More capital available - Consult when making decisions. Share responsibilities |
| Partnership Disadvantages | - Share profit - Slower decision making arguments - One partner can let you down. - Partnership ends when s.o dies - Unlimited liability both partners are liable - Can be more complex to set up particular if you draw up a Deed |
| Private Limited Companies Advantages | - Shares can be sold to large number of people - Limited liability - More controls on how the business is run - Continuity: the business doesn’t come to the end when s.o dies |
| Private Limited Companies Disadvantages | - Expensive to set up - The owners are able to keep control because they choose the shareholders - 2 important forms must be sent to Registrar of Campanies: the Articles of Association, the Memorandum of Association. |
| Public Limited Companies Advantages | - Large amount of capital can be raise by selling shares - Shares can sold easily to public - Bank are more willing to lend money to PLC |
| Public Limited Companies Disadvantages | - Small shareholders tend to have very little say in running business - Owner take no part in running a business it is done by directors and managers - Strictly controlled by laws |
| Co-operative Advantages | - Have lots of ideas to run a business - All things are shared equally |
| Co-operative Disadvantages | - Limited people not suitable for large business - Not agree with each other argument |
| Join venture Advantages | - Sharing costs important when doing big project (eg. aircraft) - Share risks |
| Join venture Disadvantages | - When the project is successful share profits - Disagreement over important project can occur |
| Franchise Advantages | - Expand the business faster - Use a recognised brand name and trade marks. - The franchisor gives you support |
| Franchise Disadvantages | - Costs may be higher than you expect - Other franchisees could give the brand a bad reputation - All profits are usually shared with the franchisor |
Created by:
junniechoi
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