Business Ownership Structures- Private Limited Companies - Advantages and disadvantages table in GCSE Business Studies

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Created by: hollysmith27
Created on: 23-05-16 12:07

Business Ownership Structures

Advantages

Limited Liability- owners money is not at risk; only that amount they invested
Can sell more shares if you need more money
Choose who you sell the shares to- usually family.

Disadvantages

Lots of Legal Work can make it more expensive: need a 'Memorandum of association' (tells people who and where the business is) and an 'article of association' (sets out how the business will be run)
Have to publish yearly accounts
If an investor gets so many shares then they could own more of the business than you and therefore you lose control

Evaluation

Good way to raise finance if you don't want to give up full rights but you still have a change of loosing control if someone buys lots of shares- unlikely though because shareholders are usually family (you should be able to trust)

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