Businesses in the private sector
- Created by: tieganlucy
- Created on: 10-03-17 10:47
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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
- Sole trader
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