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Types of Business Organisation, Words to know - Coggle Diagram

- - - - Advantages
        
        Makes all decisions
        
        Keep all the profit and requires little capital
        
        Easy to set-up (little paper work)
      - Disadvantages
        
        Unlimited liability (total responsability)
        
        Difficult to raise finance (small, no large amount of money lend by the bank)
        
        Long working hours with no holiday pay or paid time off, with no continuity
  - - - Advantages
        
        More expertise, access to capital and continuity
        
        Less financial risk
        
        Can attract investment
      - Disadvantages
        
        Lack of capital and unlimited liability (debts)
        
        Conflict of interests
        
        Sharing profit
      - Deed of parthnership
        
        Legally binding document drawn up by partners that includes
        
        Percentage of profit to be recieved for each partner
        
        Finance provided by each partner
        
        Salary entitlements
        
        Holiday entitlements
        
        1 more item...
- - - - Two documents
        
        "Articles of asociation"- responsabilities of internal members
        "Memorandum of association"- registered name, address and share structure
      - Advantages
        
        Choose their sharehold
        
        Limited liability and more expertise
        
        Maintain control
      - Disadvantages
        
        Release of financial information to authority
        
        More legal restrictions
  - - - Advantages
        
        More general sale of shares
        
        Limited liability
        
        Managerial economies of scales (efficency)
      - Disadvantages
        
        Realease of financila information to all public
        
        Dividends (pay shareholders)
        
        Losing contol of shares and more legal issues
- - - - Franchisee
        
        Easier to obtain finance and reduces the risk of failure
        
        No need on costumer base,advertising
        
        Stock control (accounting system is provided => efficency)
      - Franchisor
        
        Grows at a faster rate and at a low cost
        
        Less time spent on day-to-day issues
        
        Yearly royalities from franchisees
    - - Franchiesee
        
        Limits freedom to make decisions
        
        Pricing and product offering are decided by the franchisor
      - Franchisor
        
        Franchisee keeps most of the profit
        
        Franchisees can ruin their reputation
- - - - Risks are shared
      - Both offer expertise
      - Capital is invested by both
    - - May be a conflict of interests
      - Decision-making pñrocess slows down
      - Profit is split