Businesses in the private sector

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  • Businesses in the private sector
    • Sole trader
      • Few legal requirements to start up
      • Doesn't have to consult anyone on decision making
      • Keeps all the profit
      • Can't be taken over by shares
      • The accounts can be kept private
      • Unlimited liability - responsible for debts
      • Have to be a jack of all trades
      • Can be hard to raise capital for expansion
      • Can get overworked
      • No continuity
    • Partnership
      • Easy to establish
      • More capital due to more partners
      • Work is shared
      • Losses are shared
      • Accounts of the business can be kept private
      • Unlimited liability - responsible for debts
      • Decision making is slower
      • Profits are shared
      • Can be ended automatically if one partner resigns or dies
      • Can lack capital as only 20 partners max allowed
    • Private and public limited companies
      • Access to capital through issuing shares
      • Limited liability - not responsible for the debts
      • Investors see it as less risky
      • Continuity
      • Set up can be expensive
      • The memorandum of association takes time and money
      • Is more complicated to run
      • The danger of a takeover
      • Complicated management structures
    • Franchises
      • Using a tried and tested brand name
      • Specialist advice and training
      • Market research is already carried out
      • Easier to obtain a bank loan
      • Franchisor may charge a higher price for supplies
      • Continuing royalty payments
      • Less control over what's being sold
      • Business can't be sold without franchisors permission
      • Is for a fixed period of time
    • Co-Operatives
      • Legally straight foward
      • All involved are working towards a common goal
      • Limited liability usually
      • Stakeholders benefit
      • Customers may be members
      • Capital can be limited
      • Weak management
      • Employees may want more pay rather than profit in the business
      • Slower decision making
      • No guarantee stakeholders will get more benefits than a normal business

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