business types advantages and disadvantages

Advantages of sole trader
make your own decisions. profit not shared. own boss. Make changes when you want. cheapest start up costs
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Disadvantages of sole trader
unlimited liability. Can't walk if you're ill. no other ideas coming into the business. difficult to take time off. no one to share work/problems with.
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advantages of partnership
shared decision making. More people to invest capital. shared work load. more ideas coming into the business. job specification. small startup costs.
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disadvantages of partnership
unlimited liability. disagreements may ensue. shared profits between owners. need everyone's agreement on decisions. need to have deed of partnership drawn up (costly).
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Advantages of private limited company
limited liability. support from shareholders. shareholder capital investment. more ideas coming into the business. Bad business ideas get filtered out.
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disadvantages of private limited company
costly legal formalities to set up as LTD. shared profits. slower decision making. finances published. has to be registered at 'companies house'. can only sell shares to family and friends.
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advantages of public limited company
limited liability. no limit to number of shareholders. very easy to raise capital. sell shares on stock exchange. run by a board.
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disadvantages of public limited company
no control over who becomes shareholder. the many shareholders may have different aims. must disclose all accounts to the public. original company owners can lose majority of shareholders agree to sell shares.
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What is unlimited liability?
Indefinite extent of liability to pay a firm's debts or obligations, extending beyond the investments of the firm's owner(s), partners, or shareholder(s) to their personal assets.
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what is limited liability?
a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company. If a company with limited liability is sued, then the claimants are suing the company, not its owners or investors or their asets
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Other cards in this set

Card 2

Front

Disadvantages of sole trader

Back

unlimited liability. Can't walk if you're ill. no other ideas coming into the business. difficult to take time off. no one to share work/problems with.

Card 3

Front

advantages of partnership

Back

Preview of the front of card 3

Card 4

Front

disadvantages of partnership

Back

Preview of the front of card 4

Card 5

Front

Advantages of private limited company

Back

Preview of the front of card 5
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