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Types of Business - Coggle Diagram
Types of Business
Sole Trader :
➕ Simple and inexpensive to set up
➖
Unlimited liability (personal assets at risk)
➕
Complete control over decision-making
➖
Limited ability to raise capital
A business owned and operated by one person
➕ All profits go to the owner
➖ May be difficult to take time off or manage all aspects alone
( A local freelance graphic designer.)
Partnership :
( A law firm with two or more partners.)
➖ Unlimited liability (personal assets at risk)
➕ More capital available than a sole trader
➖ Profits are shared
➕ Flexibility in management and operations
A business owned by two or more people who share responsibilities and profits
➕ Shared responsibility and workload
➖ Potential for disputes between partners
: Limited Company
( A local restaurant chain with several branches. )
➖ Profits are subject to corporation tax
➕ More credibility with customers and suppliers
➖ Less privacy (public disclosure of financial information)
➕ Easier to raise capital through shares
➕ Limited liability (personal assets are protected)
➖ More regulatory requirements and paperwork
A business where the owners' liability is limited to their shares in the company.
Public Limited Company
A company whose shares are traded on the stock exchange and can be bought by the general public
(Tesco, a major UK supermarket chain)
➖ Monitored closely with comprehensive regulatory standards
➕ Enhanced profile and credibility
➕ Ability to raise significant capital through public share offerings
➖ Risk of hostile takeovers
➕ Liquidity for shareholders
➖ Higher costs of compliance and reporting meaning
Public Sector :
(Not-for-Profit Organizations)
➕ May receive government funding and tax advantages
➖ May face bureaucratic constraints
➕ Often benefit from a positive public image
➖ Limited flexibility in spending and operations
➕ Focus on social goals rather than profit
➖ Dependence on government or donation funding
( The British Red Cross.)
Organizations that operate to fulfill a social mission rather than to generate profit, funded by public money or donations