Classifications of Business

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  • Classifications of business
    • Franchise
      • Sell a logo/brand or method of company to franchisee
      • Most common in fast food sector
      • Franchisor gets % of profits with little involvement
      • Rent paid by person running franchise
      • Low risk for franchisor
      • Grows business quickly
      • Can result in bad reputation for franchise
    • Partnership
      • Between 2 and 20 partners
      • Each partner usually brings money
      • Deed of partnership when setting up
      • Must share profits
      • More difficult to make unanimous decisions
      • Share workload
    • Private Limited Company
      • Operate in private sector
        • Exist to make a profit
      • Limited liability
        • Only assets of business liable, not personal assets
      • Sell shares to family and friends
      • Keep most financial aspects private
    • Sole Trader
      • Most common
      • Little red tape
      • Inexpensive to set up
      • Keep all profits
      • Make all decisions
      • Must be good at everything
      • Heavy workload
    • Public Limited Company
      • Operate in private sector
        • Exist to make a profit
      • Limited liability
        • Only assets of the business are liable, not personal assets
      • PLC after name
      • Larger
      • Most well known
      • Sell shares on the stock market
        • Risk of losing majority ownership
      • Must publish annual finance report
        • Can attract investors
        • Can reduce share price
      • More red tape involved
    • Co-operative
      • Business owned by members with equal voting rights

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