Test 1 : T1 W3 - types of business ownership, australian consumer law, consumer rights and protection

sole trader

business owned and operated by one person

advantages of being a sole trader

few legal requirements, receive all profit, own boss

disadvantages of being a sole trader

unlimited liability, limited finance, lack of expertise

partnership

a business owned by two or more people

advantages of being in a partnership

partners bring different skills and abilities, share start-up costs, one partner can go away and business can still run

disadvantages of being in a partnership

unlimited liability, disagreements, no continuity

small proprietary company

a company that meets two of the folowing :

- consolidated revenue (for financial year) is less than $50 million

- value of gross assets (end of financial year) is less than $25 million

-less than 100 employees

advantages of being a small proprietary company

continuity, owners are not liabily for company losses, 50 shareholders can bring different experiences, resources and connections,

disadvantages of being a small proprietary company

tax free is not available for company, dissolving company is time consuming and expensive, business must register with authorities.

franchise

A business established or operated under an authorization to sell or distribute a company's goods or services in a particular area

franchisor

an entrepreneur who owns the trademark

franchisee

an entrepreneur who buys into existing franchise