Types of business ownership


Categories of ownership

Business Ownership:

Limited Liability - Private Limited Company and Public Limited Company 

Unlimited Liability - Sole Traders and Partnerships 

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Sole Trader


  • Sole Trader makes all the decisions 
  • Quick and Easy to set up
  • Sole Trader keeps all of the profits 
  • Finical information is kept private


  • Unlimited Liability
  • Harder to raise money to start or grow the buissness 
  • A lot of pressure on one person
  • No one to cover when sole trader is ill or takes time off
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  • Owners may have wider expertise and can share ideas and desicon making.
  • Owners share the risk
  • Finicial information is kept private


  • Desicions made by one partner can affect all partners
  • No longer exists if one partner leaves
  • Profits are shared 
  • Partners may disagree
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Private Limited Company


  • Owners have limited liability 
  • Customers may trust 'Ltd' more than other businesses 
  • Continues to trade even if the shareholders change.
  • Could be easier to raise finance to establish or grow the business


  • More complex to set up than a sole trader or partnership
  • Shareholders may disagree
  • More information must be reported to the government 
  • Financial information is published and can be accessed by others
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