Business ownerships
- Created by: Lucysalisbury
- Created on: 24-04-16 13:48
View mindmap
- Sole Trader
- ACCN2- Business ownership
- Partnership
- Another easy form of business ownership.
- Business owned by multiple people.. 2-50.
- Partners share the decision making, can improve existing ideas.. develop on eachothers.
- Partners may have different skills.
- LIMITATIONS
- Owners have less control
- Profit is shared
- Potential disagreements
- Unlimited Liability.
- Incorporation
- Some people don't like the idea of unlimited liability.
- So they set up companies. A company is a separate legal entity.
- A company doesn't have an owner, instead it has shareholders.
- So they set up companies. A company is a separate legal entity.
- Private Limited Companies.
- Can only sell shares Privately
- Company can choose who they sell their shares with.
- Advantages
- Limited Liability
- Pays out dividends
- Added credibility which'll make it easier to borrow money.
- Unlimited life.. don't cease with the death of owner.
- Disadvantages
- Must hold annual meetings.
- More expensive to set up
- Pay annual fee's and have to meet filing obligations.
- Public limited companies
- Can sell their shares publicly.
- Company has no control over who decides to buy their shares.
- Advantages
- Limited liability
- Will continue to grow even if customer dies.
- Can make large amount of capital as there is no limit as to how many shareholders allowed.
- Disadvantages
- Costly and time consuming due to many legal requirements.
- Must publish their accounts
- Huge size and may face management problems.
- Some people don't like the idea of unlimited liability.
- Partnership
- This is the easier form of business ownership.
- Business is owned by 1 person.
- Owners make all the decisions.
- Owner can work when they choose.
- Owners get 100% of the profit.
- LIMITATIONS
- Business will stop running if owner is sick.
- Unlimited Liability.
- ACCN2- Business ownership
Comments
No comments have yet been made