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Types of ownership - Coggle Diagram
Types of ownership
Partnerships
Number of Owners
2-20
Liability
Unlimited
Advantages
More capital
Partners can specialise in different areas
Accounts are kept secret
Disadvantages
Unlimited liability
Partners have to raise all the capital
Hard to borrow from banks
Conflict between partners
Control
Partners
PLC
Description
Shares can be sold on the stock exchange
Control
Board of Directors
Ownership
Shareholders.
Advantages
Larger, more powerful business.
Limited liability
Easy to raise capital on stock exchange.
Managers can specialise.
Disadvantages
Accounts are public.
complicated legal process to set up.
Decision making can be slow.
Could lose control of the business.
Private Limited Company (ltd)
Ownership
Shareholder
Control
Shareholders
Description
Shares can be sold to friends and family.
Advantages
Can raise finance by selling shares.
Easier to borrow money from banks.
Responsibility is shared.
Limited Liability
Managers can specialise.
Easier to keep control.
Disadvantages
Accounts must be made public.
Harder to sell shares - only sell to friends and family.
Complicated to set up - legal forms needed.
Sole Trader :
Disadvantages
very stressful
Unlimited Liability
Less Capital
No one to share responsibility with.
Liability
Unlimited liability
Number of owners
1
Advantages
Get to make alll decisions
Owner keeps the profits
Keep accounts secret
Easy to set up
Control
Owner
Franchises
Disadvantages
Franchisee
Must buy stock from the franchisor
Less control of the business
Have to give part of the profit to franchisor
Franchisor
The franchisee might ruin their corporate image.
Advantages
Franchisee
They dont have to pay for advertising and marketing.
They get a well known business so more sales.
Franchisor
Allows easy expansion
They get a share of the franchisee's profits every year
Description
A agreement between a large business and a smaller business
to use the larger business' branding.
Social Enterprise
Description
An organisation that mixes charitable aims with a business approach.
Ownership
Charitable trust
Outputs of Social enterprise
Economic Outputs
employment for local people.
social outputs
Employment for socially disadvantaged people.
Training for unemployed, disabled people.
councilling for disadvantaged people.
Environmental outputs
Cleaning public spaces
encourage recycling.
Educating young people about environmental issues.