Types of Business Organisation
- Created by: Benjhigg
- Created on: 21-04-15 09:39
View mindmap
- Types of Business Organisation
- Sole Trader
- Positives
- Doesn't need much investment
- Can make their own decisions
- No legal paperwork
- Cheap and easy to set up
- High motivation
- Person who is the exclusive owner of the company, entitled to keep all profits
- Negatives
- Working long hours
- No shared responsibility
- Collateral can be repossessed
- Specialist skills - got to be the "jack of all trades"
- Taxed through income tax
- difficult to find cover (e.g. holiday / illness)
- Positives
- Partnership
- Unlimited Liability
- Negatives
- Unlimited liability
- High taxation
- Arguments can occur with decision making. Trust is needed, so written agreement between partners should be made
- Liable for each other's debt or actions
- Positives
- Shared responsibility
- Flexible
- Financial records are private
- Capital is shared
- 2-20 company members participating towards the overall capital. They share each other's debt, risks, responsibility etc. Sleeping partners invest but to not manage
- Negatives
- Limited Liability
- Similar to Ltd but needs to be incorporated and resister and file accounts with the company house
- Unlimited Liability
- Private Limited Company
- Positives
- Separate entity
- Limited liability
- Only taxed on profits
- Negatives
- Bigger setup fees
- Corporation tax
- Annual meetings and fees
- Owners and company are separate entities. Shareholders are owners of limited companies, and have limited liability and are not responsible for company debts
- Positives
- Public Limited Company
- Positives
- The shares and freely transferable
- There is no limit to the number of shareholders
- Financial records are relatively private
- Separate legal entity
- More capital through the sale of shares
- Limited liability
- Negative
- Strict controls and regulations to comply
- Costly and time consuming
- The original owners may lose control
- Legal formalities required
- Huge in size and may face management problems
- A public limited company is a company offering equity shares with limited liability to public investors on a registered exchange
- Positives
- Sole Trader
Comments
No comments have yet been made