Different Business Forms Flashcards
1
Q
What are some forms of ownership
A
Private and public
2
Q
What does private ownership involve
A
- sole traders
- private limited company
- ltd
- non for profit organisation
3
Q
What does private ownership involve
A
- sole traders
- private limited company
- ltd
- non for profit
4
Q
Advantages of sole trader
A
- make all key decisions
- easy to set up
- keep all profits
- be own boss
5
Q
Disadvantage of sole trader
A
- finance limited
- lack of skills
- long working hours
- unlimited liability
6
Q
Advantage of private limited company
A
- limited liability
- control over who buys shares
- managers can be employed
7
Q
Disadvantage of private limited companies
A
- legal procedure to set up
- accounts are public
- decreased control/profit
8
Q
Advantage of public limited company
A
- limited liability
- can adverse shares to public
- raise finance easily
- media coverage
9
Q
Disadvantage of public limited companies
A
- can’t control who buys shares
- can loose control
- have to pay dividends
10
Q
Advantage of not for profit
A
- good rep
- encourages customers/employees
11
Q
Disadvantage of not for profit
A
- need donations
12
Q
Advantage of public sector
A
- free to anyone
- provides essential services
13
Q
Disadvantage to public sector organisation
A
- government need revenue
- only for governments
14
Q
Reasons for changing business form
A
- growth: owner may raise capital by selling shares or becoming a plc
- control: degree of control desired by the original owners
- protection: may want to be protected from limited liability
