Business Ownership
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- Created by: bronteappleby
- Created on: 14-03-14 08:40
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- Forms of Business Ownership
- Sole Traders
- Owned/controlled by one person
- Unlimited Liability
- Easy to set up
- Responsible for all decisions
- Relient on Sole Trader
- Does not share money
- Rewarding
- Long hours
- Initial Capital is small
- Partnerships
- Unlimited Liability
- All partners are liable
- More people to contribute to start up capital
- More room for expansion
- Between 2-20 people
- Specilaities
- No maximum partners for Solicitors, Accountants, Stock Exchange, Surveyers
- Share decisions
- Relient on everyone, less likely to lose customers
- "Sleeping Partners" only invent money, don't have any say
- Only lose their investment
- Agreements and Disagreements
- Private Limited Companies (Ltd.)
- Limited Liability
- Decides how many shares they want to sell (e.g Virgin)
- Net profit is shared between shareholders in the form of dividends
- Shareholders have an agreed salary
- Total start up capital = £40,000
- Any remaining profit aids expansion
- Small/Medium Business
- Not on stock market
- Legal Formalities take a long time
- Longer time to register as a business
- If they get sued, the whole company becomes sued
- Public Limited Companies (Plc)
- Bigger than Ltd's
- Limited Liability
- Owned by Shareholders
- Shares on Stock Market
- Annual Meeting of Shareholders
- Long time for decisions to be made because of the amount of people
- Have to release accounts meaning Competitors can see it
- Easier to raise capital
- Suppliers feel more confident about dealing with legally established companies
- Company name protected by law
- Employees and Shareholders are seperate
- Running of the business is tightly regulated by law
- Franchises
- Buying into an established business
- Pay for the right to use the name and branding of an existing business
- Gets training
- Not as risky as starting up a new business
- If one franchise gets a bad reputation, they all do
- Sole Traders
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