business ownership

Unlimited liability

Owner is personaööy liable for all debts. No separate legal existence.

Limited liability

People who invest in the business only risk the amount they have invested if the business becomes insolvent. Separate legal identities.

Soletrader

A business that is owned and run by one person.

Adv sole trader

Quicker decision making

Flexible working hours

Quick and easy to set up - no complicated paperwork

Disadv soletrader

Lack of skills and expertise

Fewer ideas

Unlimited liability

Partnership

A partnership between two or more people to take joint responsibility for the running of the business, to share the profit and to share the risk

Deed of partnership

Profits and losses shared

Money each partner invests

Details of each partners duties and responsibilities control

Sleeping partner

Someone who invests money into the deed of partnership but does not play an active role in the business

Adv partnership

Cheap and easy to set up- no complicated paperwork

Extra capital available

Workload is shared

Disadv partnership

Unlimited liability

Disagreements between partners

Shared profits between partners

Ltd

Profits can be reinvested back into the business or paid to the shareholders in the form of dividends

Adv ltd

Limited liability

More capital

Separate legal status

Disadv ltd

Separation of ownership and control

difficult to raise additional finance

More expensive to set up

Plc

Usually a much larger business owned by members of the general public and other businesses who have invested money into the company by buying shares on the stock exchange.

Adv plc

Limited liability

Additional capital raised

Separate legal entity

Disadv plc

Must publish financial accounts each year

Separation of ownership and control

Expensive to set up

Social enterprise

A business with primarily social objectives whose surpluses are reinvested for that purpose rather than the need to make profit for shareholders

Consumer cooperative

Where a group of local consumers get together for mutual benefit. They buy produce together and srll it for a fair price. The co-operative is owned and managed by members, who are also customers.

Worker cooperative

A business that is owned ans controlled by the whole workforce. People who work within the business are in control rather than putside shareholders and its the most democratic type of business; everybody plays a part in the decision making process

Adv cooperatives

Profits fairly distributed among members

Job satisfaction

Improved customer service

Disadv cooperative

Decision making takes time

Focus on ethics may limit growth and profit maximisation

Charities

Organisations which aim to raise money in order to support a cause. Focus on minimising costs and organising fundraising activities in order to maximise donations