1.3

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  • Created by: hanfa
  • Created on: 15-09-20 19:39
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  • 1.3
    • sole trader: easy to set up, owner makes all decisions, the business tops when the owner dies, no information of profits is published to the public, limited raising finance because there is only one person to invest in savings and banks aren't helpful as its too risky, the business cant sell shares, unlimited liability, high workload for owner.
    • private limited company: needs legal documents which take time to set up, shareholders can restrict who buys shares, the business will continue even if shareholders ell off or die, the public can see all information, raising finance is easier to do from banks or investments.limited liability, managers are employed to make decisions.
    • public limited company: need to set up legal documents which take much time, anybody can buy shares, the business would continue even if shareholders die or sell off, raising finance is easier, limited liability, managers employed to make decisions.
    • partnership: easy to set up just need a deed of partnership to set up, partners make all decisions but partners can disagree and profits have to be shared between all partners.if an owner or partner leaves a new deed will be needed, no information about profits are published, cannot sell shares, raising finance can be difficult for many partners and banks are too risky, unlimited liability, workload is shared between all.
    • liablities:
      • limited liability: the owners of a business can only lose the money they have invested in a business if it fails.
        • the shareholders who own the company dont have to pay off debts or private possessions to pay off debts if the business fails.
        • it helps business to start up and raise extra finace to expand becasue people are willuing to invest if they know they arent rsiking their won personal possesions.
        • forming a business as a limited company can be complicated becasue various legal documents need to be completed.
      • unlimited liability: the owner of a business is responsible for repaying all the debts of a business
        • if the buiness goes bankrupt, they have to pay off everything themselves with asssests or private possessions to pay it all off.
        • people may be discouraged to setting up becasue theyre risking their own personal possessions wich can limit the creation and expansion of a business.
        • its easier to start up as a sole trader or partnership becasue there not legal documents hta need ot be sent to places.
    • suitability for ownership for types of businesses
      • private limited company: larger amounts of finance,high risk, owners that want to keep control of the business.
      • public limited company: wishes to grow, needs very large amounts of finances, high financial risk.
      • partnership:need larger amounts of finance, fairly low financial risk, wider ranger of skills, have owners who want to keep control.
      • sole trader: only need small amount of finance, usually have low financial risk, require non-specialist skills.

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