Business Structures
- Created by: Ashleigh Hockenhull
- Created on: 30-03-15 14:03
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- Business Ownership Structures
- Sole Traders
- Advantages
- Real easy to set up - don't need to register with the government
- Get to be your own boss
- Keep all the profits yourself
- Make all the decsions for yourself - decision making is fast
- business that is managed and owned by one person
- Disadvantage
- Can be stressful making all decisions
- Need to handle all aspects of the business, not neccessarily good at all the things
- Unlimited liability
- huge amount of work to do - long hours, not many holidays
- business ends if sole trader dies
- Difficult to raise as much money to get the business started
- not have power of a large business over supplies and distribution - may mean higher costs, lower profits
- Advantages
- Partnerships
- created when two or more people set up in business
- Partners have an equal say in making decisions
- Equal share in profits
- Deed of Partnershiip
- Sets out the rules of the partnership
- Purpose: to avoid disputes
- Advantages
- More funds available, more money contributed
- Also more ideas
- More people involved in decision making - better decisions
- Each partner can specialize in a particular aspect of the business
- Less stressful, can cover for one another
- More funds available, more money contributed
- Disadvantage
- Different ideas - lead to disputes
- Decision making slower
- Shared profits
- Unlimited liability
- Private Limited Companies
- have limited liability
- owned by shareholders
- has an 'ltd' after its name
- can't advertse shares to general public
- must have an Article of Association
- Advantages
- Limited liability
- Status
- Company still exists if founders die
- Disadvantage
- More expensive to set up
- financial accounts available t general public
- have to pay corporation tax
- if there are any other investors original founder is not in full control of the business
- Sole Traders
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