Forms of a business

Question 1

What are some pros and cons of a partnership?

Answer 1

Pros- easy to set up- no legal formalities
- share burden of running a business
- raise more capital

Cons- unlimited liability
- share profit
-disagreements

Question 2

What is a limited company?

Answer 2

has separate legal identity from its owners, capital is raised by selling shares

Question 3

What is a private LC?

Answer 3

Small or medium sized business

Question 4

What are pros and cons to private LC?

Answer 4

pros- limited liability
- more capital can be raised

cons- have to publish their finical information
- profits shared

Question 5

What is a public LC?

Answer 5

Owned by shareholders, run by a board of directors

Question 6

What are the pros and cons of a public LC?

Answer 6

pros- production costs lower
-easier to raise finance

cons- setting up costs can be expensive
-any one can buy shares- competition use their info
- due to size its difficult to deal with customers on a personal level