types of businesses

what is a business?

any activity conducted by an individual or individuals to produce and sell goods and services that satisfy the needs of society, as well as making a profit

What is a sole trader?

a business owned and operated by one person in which the owner and businesses are regarded as one legal entity

advantages of sole trader

low cost of entry, keep all profits

disadvantages of sole trader

unlimited liability, limited expertise, if owner dies business ends

what is a partnership?

a business owned and operated by 2 - 20 people where the partner and the business are regarded as one legal entity

advantages of partnership

shared responsibility and workload, pooled funds and talent, on death of one partner business can continue

disadvantages of partnership

unlimited liability, disputes/conflict

what is a public listed company?

an incorporated business with a minimum of one shareholder and no maximum and whose shares are openly traded on the australian securities exchange(ASX)

advantages of public

limited liability, can attract extra capital by issuing shares on the share market, greater potential for growth

disadvantages of public

costly to start up, requirement to produce annual reports, rapid growth may cause inefficiencies

what is a private limited company?

an incorporated business that has a minimum of one shareholder and a maximum of 50 non employee shareholders, and whose shares are offered only to those people whom the business wishes to have as part owners

advantages of private

limited liability, seperate legal entity, growth potential

disadvantages of private

requirement of annual reports, expensive to set up and operate

what is a GBE?

a business that is government owned and operated which carries out government policies while also aiming to make a profit.

advantages of GBE

can operate with some independence from government, provides competition to private sector

disadvantages of GBE

less accountability resulting is less productivity, day to day political interference

what is a social enterprise?

a business that produces goods and services for the market, but operates with the primary objective of fulfilling a social need. the profit made will be reinvested back into the business so that it can continue to fulfil the social need

advantages of social enterprise

can open up new markets, meeting a social need can have a positive effect on profit and market share

disadvantages of social enterprise

can be difficult to focus on both financial and social objectives, difficulty in obtaining capital to start the business