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Differentiate Sole Trader, partnership, limited companies - Coggle Diagram
Differentiate Sole Trader, partnership, limited companies
For Sole Trader
Business which is owned and controlled
By on person
Business doesn’t require capital
Run effectively by one person
For advantages
Easy set up
Low overhead costs
No legal formalities
Owner’s freedom
For disadvantages
Lack of capital
Stress
Work long hours
Business no proper long term
Owner liable for losses
Numbers of owners -1
liability - unlimited
profit - solely to owner
For partnership
Number of owners - 2-20
Advantages
Capital is contributed by partners
profit share according to capital
Liability- unlimited
Profit - share among partners
Legal requirements- none
disadvantages
difficult to obtain extra capital
a partnership is not legal
For limited companies
advantages
shareholders have limited liability
easier to raise capital
employ specialist staff
company name protected by law