Ownership types 0.0 / 5 ? BusinessOwnership types BTEC NationalEdexcel Created by: Elicia17Created on: 31-07-18 10:26 Advantages of sole traders Firms are small and easy to set up Small start up costs due to small amount of capital needed to be invested Wage bill low due to few employees Owner has overall control of running the business 1 of 8 Disadvantages of sole traders No share of responsibility of the business Work long hours Difficult to have holidays Limited by capital the person has Risk of unlimited liability, have to sell personal assets to cover debts 2 of 8 Adavantages of partnerships Shared responsibility, where one partner strengths can complement others More people contribute to capital, more flexibility running the business Less time and pressure on individuals Consulting business decisions 3 of 8 Disadvantages of partnership Shared responsibility Disputes arise over decisions that has been made Distribution of profits chasing dissatisfaction for partners Unlimited liability 4 of 8 Advantages of private limited company Raising capital is easy Shareholders have limited liability Management is done efficiently Adapted to small and large businesses 5 of 8 Disadvantages of private limited company Subject to legal requirements Difficult and expensive to register One directior is required Shares not offered to the public 6 of 8 Advantages of public limited company Raise capital by selling shares Stock listed on recognized exchange means you can attract investment Financially increase in growth Availability of readily available finance Shares brought and sold 7 of 8 Disadvantages of public limited company More statutory and legal requirements Level of transparency required is higher than limited company Lose control as owner as someone heads more shares than them Higher finance 8 of 8
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