Business Structures

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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
    • 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
      • 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


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