Business AS Level

3.1.2 Understanding Different Business Forms

Reasons for choosing different forms of business and for changing business form:

Types of ownership -

• Sole Trader: your own boss, keep all profits, unlimited liability, lack of continuity
• PLC: public limited company, can sell shares on stock exchange, must publish financial information, limited liability
• LTD: private limited company, can sell shares to friends and family, must publish financial information, limited liability
• Private Sector Organisations: run privately e.g. sole traders
• Public Sector Organisations: run by the governement e.g. schools
• Non-Profit Organisations: charities, run by grants, fundraising and donations to prevent social costs and combat problems in society

Issues -

• Unlimited Liability: if the business fails, personal items are not protected 
• Limited Liability: if the business fails, personal items are…