Types of Businesses

What is a Business?

a business is an organisation that offers goods and services to consumers in exchange for money

What is a sole trader? + Pros (3) & cons (3)

a business owned and operated by one individual where the owner and business are one legal entity. low cost of entry, keep all profits, less government regulation. unlimited liability, limited expertise, if owner dies business ends

What is a Partnership? + Pros (3) & cons (2)

a business owned and operated by between 2 and 20 people where the partners and business have one legal entity. shared workload, pooled funds/talent, on death of partner business continues. conflict, profits are shared

What is a Public Listed Company? + Pros (3) & cons (2)

a business with unlimited shareholders where they list and sell shares on the ASX. separate legal entity for shareholders, greater capital, no permission needed to sell shares. Annual reports, more government regulations.

What is a Private limited company (PTY LTD) + Pros (3) & cons (2)

a business with 1-50 non-employee shareholders where business and shareholders have separate legal entity. limited liability, greater variety of expertise with more people involved, growth potential. Annual reports, expensive to set up and operate

What is a GBE? + Pros (2) & cons (2)

a business government owned and operated which carries out government policies while also aiming to make a profit. provides competition to private sector, provide services that private sector would hesitate to invest such as building infrastructure. excessive rules, can be less accountability resulting in less productivity.

What is a Social Enterprise? + Pros (2) & cons (1)

a business that aims to fulfill a community or environmental need which reinvests most of its profit back into the business. meeting social need can increase market share, positive reputation. Difficult to balance financial objectives with social objectives