Business forms
Limited liability
This means that the owner of the business has no personal liability for business debts.
The business is a separate legal entity
Unlimited liability
If a business gains debts, goes bust or is sued this could be a problem for the owner
Sole trader
This is a business owned by one owner
Pros
Cons
Easy to set up, make quick decisions, less capital needed, owner keeps all profit
unlimited liability, difficult to raise money, no one can take over, don't have economies of scale
eg. plumbers, hairdressers, builders
Private limited company
Ltds can expand and grow by selling shares, they cannot be bought by the public.
Pros
Cons
Limited liability, can raise extra capital by selling more shares, has own legal status
Company is not private,expensive, cannot sell shares stock exchange
Public limited company
Once a limited company has grown and needs futher investment it may consider to become a PLC. Shares can be bought by anyone
Pros
Cons
Limited liability, can sell shares publicly, banks and investors more likely to lend cash
Expensive, must publish annual accounts, must have £50,000 in share capital before becoming a PLC
Public sector organisations
These are all owned by the UK government.
Taxes paid by UK citizens go towards paying for the organisations
e.g nurses, police