Business Studies - UNIT 2 (TYPES OF ORGANISATIONS)

Public Limited Company (PLC)

a large business, where shares are sold to the general public.

Advantages of PLC

• limited liabilty for shareholders

• easier to borrow money

• raise large amounts of capital

Disadvantages of PLC?

• problems of size

• cost of setting up and operating

• financial info available to the public

Suitability of PLC?

• established businesses: 
  needs a very large amount of finance
  wishes to grow 

Private Limited Company (LTD)?

often, but not always, a small business owned by minimum of 2 owners within the company.

Advantages of LTD?

• limited liability

• can raise money more easily

• continuity

Disadvantage of LTD?

• administration

• financial info available to public

• sales of shares restricted

Suitability of LTD?

• start ups or established businesses:
  needs a large amount of finance
  owners who wish to keep control of the business.

Sole Trader?

a business owned by one person

Advantages of Sole Trader?

• control

• easy to set up

• financail info is private 

Disadvantage of Sole Trader?

• hours of work

• unlimited liability

• skill shortage

suitabilty of sole trader?

• start-ups
  needs a small amount of finance
  low financial risk

Partnership?

a business owned by between 2-20 partners

Advantage of Parntership?

• capital

• more skills in the business

• easy to set up

Disadvantage of Partnership?

• unlimited liabilty

• profit shared

• shortage of capital

suitability of partnership?

• start ups or established businesses:
  needs a large amount of fianance
  needs a wide range of skills

limited partnership (LLP)?

partners who provide capital for the business, but do not take part in running or operating in the business

deeds of partnership?

a document drawn up to outline key info on about the partnership

what does the deeds of partnership include?

• details on how much capital is contributed by each partner

• roles of each partner in the business

• information on how the business operates

• how profits and losses will be shared between the partners