Types of Business organisation

Sole Traders

Business owned by only 1 owner

Partnership

Business owned or controlled by 2-20 owners

Unlimited liability

The business owner is personally responsible for the business debts

Private limited company

Business owned by shareholders, who is only certain people, not public.

Public limited company

Business owned by shareholders, which is public, anyone can hold the shares.

Limited liability

If the company or business face the financial trouble, the owner’s personal assets are protected.

Franchise

Paying to use the brand’s name, products, or marketing.

Mostly, the brands are successful companies.

Franchisee

Owner who pay and uses the brand’s name etc.

Franchiser

Owner who selling the brand.

Joint venture

When two companies start new projects and share capitals, cost etc.

Co-operatives

Business owned by the company’s members/staffs.

Public cooperatives

Business owned and controlled by the governments/states.

Advantages of sole traders

1. Can keep all of profits

2. Can make their own decisions

Disadvantage of sole traders

1. Unlimited liability

2. Have to accept the responsibility

Advantages of partnership

1. More capitals

2. responsibility is shared

Disadvantages of partnership

1. Unlimited liability

2. maybe the disagreements occur

Advantages of private limited company

1. Limited liability

2. Raise a lot of capital by selling the shares

Disadvantages of private limited company

1. Cost a lot & hard/difficult to start

2. Many legal issues to deal with

Advantages of public limited company

1. Limited liability

2. Easy to expand

Advantages of franchisee

1. Less decisions to make

2. Less risk of failure

Advantages of franchiser

1. Easy and fast to expand

2. Can obtain income by selling the brand

Disadvantages of franchisee

1. Less independence

2. Difficult to make decisions to adjust the business

Disadvantages of franchiser

1. Franchisee keep the profits

2. If the local store is poorly managed, it may lead to bad reputations

Advantages of joint venture

1. Share knowledges

2. Share risks

3. Can share costs

Disadvantages of joint venture

1. Share profits

2. May disagreements occur

Advantages of co-operatives

1. Share profits with members

2. Motivate each other

Disadvantages of co-operatives

1. Decision making could be hard

2. Limited ability to raise the finance

Advantages of public cooperatives

1. Important businesses are protected

2. Can protect workers job

Disadvantages of public cooperatives

1. Less competition, results the business to become inefficient

2. Government may use the business for the political reasons