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understanding different business forms (public limited companies (business…
understanding different business forms
sole trader
owned and ran by one individual
liable for all debts and personal items may be repossed
advantages
can employ
easy so set up
complete contol
keep all profits
disadvantages
liable for all debts (unlimited liabilities)
can be very risky
harder to get finance
limited skills and high work pressure
limited companies
incorporated business
separate identity from the individual owners (limited liabilities)
advantages
can raise money by selling shares
personal assets protected
access to more skills and ideas
disadvantages
long legal set up
financial accounts registered at companies house
profits shared among shareholders
private limited companies
small and medium sized businesses
all shareholder must agree to sell shares
accounts at companies house
public limited companies
business with limited liabilities
share capital >£50,000, 2 directors and qualified company secretary
large number of shareholders
shares of the stock exchange
its value known as MARKET CAPITALISATION
role of shareholders
investors
limited liabilities
receive dividends in return for investments
banks, pension firms, insurance companies and individuals
public sector organisations
owned and run by the government
main objective to provide a service
private sector organisation
owned and run by private individuals
maximise sales and profit
non- profit organisation
an organisation established for a particular aim and objective and non for financial gain
profits will be reinvested
charities
registered as not for profit to raise money for a cause or purpose
mutuals
owned and ran by members