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Business ownership types - Coggle Diagram
Business ownership types
Sole Trader
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Advantages- Full control over decisions, full ownership of profits, greater privacy, quick and easy to set up
Disadvantages- Unlimited liability, difficult to raise capital, no one to share ideas with
Partnerships
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Advantages: Greater potential to raise finance, ideas and expertise can be shared, simple way for more than one person to set a business up
Disadvantages: unlimited liability, difficult to sell or close, partners have to agree on one decision- could fall out.
LTD
Description: privately held commercial enterprise that has one or more registered employees. e.g. restaurants or shops with a lack of national presence.
Advantages- Limited liability, control over who can purchase shares (usually family or friends)
Disadvantages- Number of shareholders can not exceed 50, can be more expensive to set up
PLC
Description: A company that offers its shares to the public on the stock market flotation. e.g. Sainsbury.
Advantages: Ability to raise high level of finance, shareholders have limited liability, prestigious profile
Disadvantages: less privacy, difficult and expensive to set up, shareholders can end up with lack of power over decisions made within the company.
Public Sector
Description: A business owned and run on behalf of the public, by the government or organisations funded by the government e.g. Healthcare. (NHS)
Advantages: stable industry, benefit local community
Disadvantages: not necessarily run for profit, expensive to maintain and operate