Chapter 4 - Types of business organisation

Private sector - owned by private individuals or groups

public sector - owned by local or natinal government

Sole Trader - is a business that is owned by one person

Partnership - is a business owned by two or more people

limited companies -

Private limited company -

Public limited company -

Franchise -

joint venture -

Sole Trader

Advantages

  • Easy & cheap to set up

  • be your own boss and be in complete control

  • keep all the profit to yourself

  • good personal relationships with customers

  • keep the secrecy of all the accounts

disadvantages

  • Hard to compete with the large firms

  • Hard to recruit workers

  • not easy to expand because it is hard to raise finance

  • High worked - not easy to have a holiday

  • Unlimited liability –
    Be Responsible for all of the business debt

Partnerships

Advantages

Easy & cheap to set up - sign up the deed of partnership

Share workload- less workload than sole trader

Raise more finance from more partner/s easier to expand the business than a sole trader

Keep the secrecy of the accounts

Disadvantages