Business Ownerships Advantages and Disadvantages

Includes the advantages and disadvantages of all ownerships

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  • Created on: 12-05-13 19:55
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UNIT 1 ­ INVESTIGATING PEOPLE AT WORK
Business Ownerships
Sole traders ­ owned by one person
Advantages include:
All profits are kept by the owner
Full control
Less complicated to set up
Has more flexibility ­ e.g. taking holidays/time off work
Disadvantages:
Unlimited liability ­ lose all their money/assets if they go in debt
No one to share decision making with
Not enough range of skills in the business
No continuity of existence if one owner dies
Partnerships
Advantages:
Decision making can be shared
More range of skills/expertise in the business
Continuity of existence after death of a partner ­ would need more shares
Disadvantages:
Disputers/conflict during decision making if not everyone agrees
Unlimited liability
No individual control
Profits have to be shared
LTD ­ Private limited company
Advantages:
Limited liability
Capital can be raised
No takeover as shared are not sold to the public
Continuity of existence
Disadvantages:
Profit has to be shared amongst a larger number of people
More complex to set up
Disputes between members

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PLC ­ Public limited company
Advantages:
Capital can be raised
Limited liability
Has high dominance in the market due to size
Disadvantages:
Takeover ­ as shares are sold to public on stock exchange
Public can see accounts
Complex to set up
Disagreements between owners
Co-operatives ­ general info
Must be registered under Companies House
Each owner has equal responsibility and say in the business
3 members required
Profits shared equally…read more

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