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Advantages and Disadvantages of the various legal structures - Coggle…
Advantages and Disadvantages of the various legal structures
SOLE TRADER
Low cost of entry
Complete control
Owner's rights to keep all profits
Advantages
Disadvantages
Personal (unlimited) liability for business debts
End of business when owner dies
Difficult in raising finance for expansion
PARTNERSHIP
Shared responsibility and workload
Less costly to operate than a company
Advantages
Low start-up costs
Disadvantages
Personal unlimited liability
Liability for all debts, includimg partners
Difficulty in finding a suitable partner
COMPANIES
(public and private)
Advantages
Easier to attract public finance
Experienced management - board of directors
Can transfer ownership easily
Limited liability
Disadvantages
Cost of formation
Becoming too large resulting in inefficiencies
Double taxation - company and personal
GOVERNMENT ENTERPRISES
Provide essential community services such as healthcare, education
Formed easily
Include some of the largest employers of people in Australia
Advantages
Disadvantages
The government companies have to follow the policies & rules framed by the Legislative or Parliament & most of the rules are rigid.
Politicians are the ones who run these businesses. They may not be considered the most qualified.
The public don't have any control over rules and regulations