Business Ownership

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  • Forms of Business Ownership
    • Sole Traders
      • Owned/controlled by one person
      • Unlimited Liability
      • Easy to set up
      • Responsible for all decisions
      • Relient on Sole Trader
      • Does not share money
      • Rewarding
      • Long hours
      • Initial Capital is small
    • Partnerships
      • Unlimited Liability
      • All partners are liable
      • More people to contribute to start up capital
      • More room for expansion
      • Between 2-20 people
      • Specilaities
      • No maximum partners for Solicitors, Accountants, Stock Exchange, Surveyers
      • Share decisions
      • Relient on everyone, less likely to lose customers
      • "Sleeping Partners" only invent money, don't have any say
        • Only lose their investment
      • Agreements and Disagreements
    • Private Limited Companies (Ltd.)
      • Limited Liability
      • Decides how many shares they want to sell (e.g Virgin)
      • Net profit is shared between shareholders in the form of dividends
      • Shareholders have an agreed salary
      • Total start up capital = £40,000
      • Any remaining profit aids expansion
      • Small/Medium Business
      • Not on stock market
      • Legal Formalities take a long time
      • Longer time to register as a business
      • If they get sued, the whole company becomes sued
    • Public Limited Companies (Plc)
      • Bigger than Ltd's
      • Limited Liability
      • Owned by Shareholders
      • Shares on Stock Market
      • Annual Meeting of Shareholders
      • Long time for decisions to be made because of the amount of people
      • Have to release accounts meaning Competitors can see it
      • Easier to raise capital
      • Suppliers feel more confident about dealing with legally established companies
      • Company name protected by law
      • Employees and Shareholders are seperate
      • Running of the business is tightly regulated by law
    • Franchises
      • Buying into an established business
      • Pay for the right to use the name and branding of an existing business
      • Gets training
      • Not as risky as starting up a new business
      • If one franchise gets a bad reputation, they all do

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