Legal Structures

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  • Legal Structures
    • Sole Trader
      • Only owner of the business
      • Responsibility for everything
      • Unlimited Liability
    • Partnerships
      • Up to 20 people owners
        • Less workload
      • Unlimited liability
        • Easier to get funding
    • Private Limited Company
      • Invited shareholders only
        • Gives owner more control
      • Support from other members of staff
      • Reduce risk
        • Financial
          • Banks reluctant to lend money due to limited liability
          • No repayment
          • Interest
      • Shares not advertised
    • Public Limited Company
      • Can float on the stock market
      • Shareholders have no say - the owners act on their behalf
      • More formal structure, i.e. accounts
      • Dividends to shareholders and costs to set up
      • Greater finance is avaliable
      • Greater risk of takeover due to lower shares
      • Economic conditions
    • Franchaise
      • Type of PLC
      • Franchaiser gets paid by franchaisees to use material
      • Can only sell franchaisors products
      • Individuals can set up using an established brand

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