Definition: An individual who owns a business (one person).
Advantages: They are in charge of all business decisions and get all the profit and earning (apart from expenses.) They can adapt quickly to change and it is easy to set up.
Disadvantages: They never get a holiday or a break unless they find a cover. They have long working hours and if they’re off sick, the business might have to stay closed. They have unlimited liability - they are personally responsible for damages, debts and losses.
Examples: Electrician, hairdresser, shopkeeper, plumber, builder
Definition: Two or more people who run/start a business together. Deed of partnership is drawn up to stop disputes about profit and workload share. It is a legal document.
Advantages: Facilities, ideas, staff are shared, and more money is brought into the business. The workload can be shared and people can cover for eachother instead of a break never being available.
Disadvantages: It is incorporated, each partner could still be sued. There is still unlimited liability. The profits have to be shared.
Examples: Solicitor, accountants, lawyers, doctors.
Definition: A cooperative is owned and run by a group of people who have a shared interest in the business.
Advantages: Everyone gets an equal benefit and it is run democratically, so all the workers get a say in how it’s run. Machinery and equipment is a lot cheaper when sharing the price. Overall, they will get a better price for things in their trading position.
Disadvantages: If many people work for the business, your share of the profit is lower as it has to be divided equally.
Examples: Co-op, farmers, fairtrade, dressmakers