3.1.2 Business Ownership

• Owned and managed by one person
• Can employ other staff

Advantages:

• Quick and easy to set up
• Owner can make decisions themselves, so decision-making is faster
• All profits are kept by owner
• They can be their own boss

Disadvantages:

• Sole traders have to manage all parts of the business
• Unlimited liability
• Business dies with the owner
• May be difficult to source capital

• Under the 1890 Partnership Act, a partnership is created when two or more people set up in business together for a common purpose, such as profit.
• Usually allowed to a maximum of 20 partners

Advantages:

• More funds are available as there are more people
• New partners may bring new skills
• Can cover for each other (eg when one goes on holiday, the other partner(s) can operate the business)

Disadvantages:

• Unlimited liability
• Disagreement/conflict could occur between different partners
• Profits are shared
• One partner is liable for the actions of other partners

• Owned by shareholders
• Sells shares privately
• Can be restrictions on who shares are sold to (more control)

Advantages:

• To customers, a company has more status than a sole trader
• Limited liability
• Business still exist after the owner dies
• Managers can be employed to run the buisness while owners retain control

Disadvantages:

• Various legal procedures need to be completed, cositng time and money
• A summary of the buisness' accounts must be made available to the general public, including competitors
• Accountants must be checked by an auditor
• The business must pay corporation tax
• Any additional shareholders become inportant stakeholders. They may have different views and objectives and they may not work well with the entrepeneur.

• Shares are floated on the stock exchange
• Anybody can buy shares
• Share prices change according to demand

Advantages:

• Has access to a greater number of investors
• Attracts cheap publicity
• Usually have more status than an ltd and are often bigger
• Relatively easy for shareholders to sell shares so therefore shareholders are more likely to buy shares

Diadvantages:

• More media coverage can be bad if the business does something wrong
• A plc cannot control who buys its shares
• More regulated; has to do more things according to the law
• New shareholders may have opposing views

• Mainly charities
• Set up to achieve objectivews other than profit
• Will srill have to rasie funds and invest just like other companies

Advantages:

• Good ethical image to customers
• Helps other people

Disadvantages:

• Can be vulnerable to media 'scandals' and probes
• Can be hard to raise finds if the organisation is obscure
• Doesn't generate any profit for the owners/shareholders