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Types of Business Organisations - Coggle Diagram
Types of Business Organisations
Sole Trader
A person who owns and runs their own business.
Unlimited Liability- The business owners personal assets may be seized to pay for business debt.
Advantage- Owner has total control of business.
Disadvantage- They suffer all losses.
Private Limited Company
Two types- CLS & DAC
Limited to 1-149 shareholders
Advantage- Shareholders have limited liability.
Disadvantage- Shareholders have little say in the running of the company.
Public Limited Company
A company with an infinite amount of shareholders that intends to seek listing on the Public Stock Exchange.
Abbreviated to Plc
Advantage- Access to finance through shares
Reduced control of business.
Franchising
An agreement that allows a franchisee to use an established business's logo, product/s, branding, ect. with permission of that business.
Advantages- Opening a franchise is less risky than starting their own business
The franchisor can expand
Disadvantages-The reputation of the franchisor's brand is put at risk
The franchisor earns less profits than if they owned and managed the outlets themselves.
Costs of opening a franchise are expensive.
Co-Operatives
There are 4 types- Worker, consumer, producer and financial.
Advantage- There's a limited liability.
Disadvantage- There can be conflicts between members.
Minimum of 7 members
State Sponsored Body
There are 3 types- Statutory (Non-profit), companies the government owns shares in and subsidiaries (Companies with companies the government owns shares in)
Advantage- Provides a country with essential services.
Disadvantage- Losses are funded by tax payers.
