Business structure Flashcards
What are types of business structures?
Sole trader
Private limited company
Public limited company
Partnership
Not-for-Profit org
Public sector
Private sector
What is Unlimited liability ?
Unlimited liability refers to the legal obligation of business owners, where they are personally responsible for all debts and obligations of the business, potentially risking personal assets to settle business liabilities.
What is limited liability ?
Limited liability refers to the legal protection for shareholders or owners of a company, limiting their personal financial liability to the amount invested in the company.
What is a sole trader?
Someone who owns and runs a business by themselves .
Sole trader Pro+Con
CHEAP
PROFIT (only to sole trader)
High motivation
Unlimited liability
Limited capital to invest
Limited skills
Can’t be ill
What is a Public Sector(PLC) + examples
Owned controlled by government rather than individuals
Education
Health
Police/Army
What is Private Sector(LTD) + examples
Owned controlled by individuals rather than government
Sole trader
Public limited company
Private limited company
Private sector (LTD) Pro + con
Limited liability
Flexible
Financial record private
More capital through shares
Complex to set up(Legal)
Loss of control
Can’t sell to public(shares)
Public Sector(PLC) pro + con
Limited liability
More capital obtained through shares
Lack of privacy(Financial records)
Complex(legal)
Loss of control
what is a not for profit org ?
Business that provides benefits to Society for little to none profit
Examples of Not for profit org
Charities (Benefit well being of society)
Societies (Church)(similar interest)
Co-op(Well being for members)
Members (Staff,Customers,suppliers)
Factors affecting choice of structure ?
Finance
Nature of Business
Personal Pref
Size of Business
