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Advantages and Disadvantages - Coggle Diagram
Advantages and Disadvantages
Sole Traders
advantages
Easy to set up and easy to close/shutdown
owner has complete control over the business
minimal paperwork
disadvantages
Harder to finance the company
The business is fully reliant on the owner so if the owner becomes ill the business would suffer
Example: Hairdressers
Partnerships
Advantages
minimal paperwork once partnership is set up
partners can provide specialist skills
Easier to finance the company with a partner
Business would benefit more with the skills and expertise from more than one owner
Disadvantages
A mistake from one of the owners would effect the interests of the other owners
More complicated to sell or close the business
Example: real estate firms
LTD
advantages
limited liability, which protects the sharehoders
easier to raise finance for the company
Stable structure, business continues to exist even when shareholders change
disadvantages
Higher admin costs
public disclosure of company information
public sector
Advantages
Easier to grow and diversify
Quicker to raise money
disadvantages
Disagreements on how to run the company.
Difficult to peruse objectives other than increasing profit.
Example: Education