business
advantages
disadvantages
you’re the boss
you keep all the profits
start-up costs are low
establishing and operating your business is simple
you have maximum privacy
it’s easy to change your legal structure later if circumstances change you can easily wind up your business
you have unlimited liability for debts as there’s no legal distinction between private and business assets
your capacity to raise capital is limited
all the responsibility for making day-to-day business decisions is yours
it can be hard to take holidays
you’re taxed as a single person the life of the business is limited
partnership
advantages
partnership
disadvantages
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two heads (or more) are better than one
your business is easy to establish and start-up costs are low
more capital is available for the business
you’ll have greater borrowing capacity
high-calibre employees can be made partners
there is opportunity for income splitting, an advantage of particular importance due to resultant tax savings
partners’ business affairs are private
there is limited external regulation
it’s easy to change your legal structure later if circumstances change
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the liability of the partners for the debts of the business is unlimited
each partner is ‘jointly and severally’ liable for the partnership’s debts; that is, each partner is liable for their share of the partnership debts as well as being liable for all the debts
there is a risk of disagreements and friction among partners and management
each partner is an agent of the partnership and is liable for actions by other partners
if partners join or leave, you will probably have to value all the partnership assets and this can be costly.
plc
advantages
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the business has the ability to raise additional finance through share capital.
the shareholders have limited liability.
increased negotiation opportunities with suppliers in terms of prices because larger businesses can achieve economies of scale
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disadvantages
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the business has the ability to raise additional finance through share capital.
the shareholders have limited liability.
increased negotiation opportunities with suppliers in terms of prices because larger businesses can achieve economies of scale
click to edit