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advantages and disadvantages - Coggle Diagram
advantages and disadvantages
sole traders
advantages
quick and easy to set up
simple to run
minimal paperwork
easy to close or shut down
disadvantages
unlimited liability
harder to raise finance
the business runs correspondent to the owner
they can pay higher tax rates
example
a food cart
LTDs
advantages
limited liability
easy finance
they have a stable structure
disadvantages
greater admin costs
the directors have legal duties
example
John Lewis
PLCs
advantages
limited liability
easy finance
stable structure
disadvantages
greater admin costs
public disclosure of company information
the directors have all legal duties
example
Tesco
public sector
advantages
they are owned on behalf of the public
funded by the government
they can still make profits despite not being run for that
disadvantages
difficult to manage
consumer interests may be ignored
expensive to maintain and operate
example
NHS
partnerships
advantages
simple to run
minimal paperwork
they can benefit off each other
specialist skills
they have a better chance to raise finance
disadvantages
unlimited liability
one poor decision affects them both
harder to raise finance compared to a company
its complicated to sell or close
example
Ben and Jerry's
cooperative
advantages
less taxation
funding opportunities
democratic organisation
disadvantages
lack of membership and participation
obtaining capital through investors
example
housing cooperatives
charitable trusts
advantages
don't have to pay income tax
can raise funds through the public
can get VAT treatment
disadvantages
have to follow strict rules
can't make profits themselves because they must only be for charitable businesses.
all staff are volunteers
example
British Heart Foundation
voluntary
advantages
much lower costs
board and shareholders remain in the company
much less public than administration
disadvantages
it doesn't bind the secured creditors
they can only run for 3-5 years
a proposal takes at least 3 weeks
example
trade unions