Liability Flashcards
(12 cards)
What is a sole trader
1 person that owns and runs their own business
What are the advantages of a sole trader
Full control
Full profit gain
You are the boss
Make all decision
Cons of a sole trader
Unlimited liability for debts of the business
Less sources of finance available
Ideas are limited
Less free time
What is a partnership
Usually a business owned by 2-20 people
Advantages of partnership
More ideas
Shared workload
More sources of finance available
Shared loss
Disadvantages of a partnership
May be harder so agree on 1 decision
Shared profit
Loss control
Unlimited liability
What is a ltd
When u can sell shares to friends and family
Advantages of an ltd
Less risk of takeover
Allows inner circle to grow financially
Limited liability
Disadvantages of a Ltd
More paper work
Loss of ownership
Limited source of finance as can’t sell shares to public
Have to publish financial documents
What is a public limited company
When u can sell shares on the market
Advantages of a plc
Don’t need to publish financial documents
Limited liability
Can sell shares to raise a large sum of money
Disadvantages of a plc
Risk of takeover
Get paid in dividends
