1.2 Types of business

Sole Trader

Business that is owned and operated by one person with objective of making a profit

relies on skills, talents and experience of owner

Advantage and Disadvantage

• Owner has complete control

• Unlimited liability, responsible for all debts

Partnership

Business that is owned between 2 and 20 partners

all partners share in risk and reward

Advantage and Disadvantage

• Greater pool of knowledge, experience, funds and talent available

• Hard gaining total agreement from all partners when making decisions

Private Limited Companies

Incorporated business owned by 1 and 50 shareholders

shares in private company can only be attained by who business wishes to have

Not traded on security exchange (asx)

Advantage and disadvantage

• Limited liability, owners are seperate entity

• More costly to establish

• Owners can still be held personally liable in mishaps

Public listed company

Incorporated business that has a minimum of 1 and no maximum shareholders

shares freely traded on asx

Advantage and Disadvantage

• Limited liability, easier to attract public finance

• Expensive to establish

• greater public scrutiny

Social enterprise

Business that produces goods or services to sell to consumers, exists to benefit society

fulfil social needs such as:

• Providing employment opportunities for disadvantaged

• Contributing to other causes

Advantages and Disadvantages

• Provide a point of difference from other competing businesses helps attract companies

• Difficult to focus on social and financial objectives

Government Business Enterprise

Commercial entity that is owned and operated by government

main purpose of gbe is to carry out the policy of the government through delivery of paid for services to community