types of business structures Flashcards
(16 cards)
what is an unincorporated business
no seperate legal existence from owner (either sole trader or partnership)
what is an incorporated business
seperate legal existence apart from its owners
what is an unlimited liability
business owner is personally responsible for all business debts
what is limited liability
shareholders aren’t responsible for business debts
what is a sole trader
owned by an individual
provides finances
makes decisions
makes business decisions
can employ peoples
unincorporated subject to unlimited liability
pro and cons for sole trader
inexpensive to set up
hard to achieve work life balance
what is a partnership
owned by 2-20 individuals unincorportated
what is a pro and con of a partnership
inexpensive to set up
unlimited liability - personal assets at risk
what is a private limited business
1 director
1 shareholder can be same person
shares sold privately
incorporated business
owned by 1 -50 non employee shareholder
what is a pro and con of private limited business
pay company tax rate which is cheaper than income tax
more expensive to set up
what is a public listed company
1 minimum shareholder
minimum 3 directors
incorporated limited liability
what is a pro and con of public listed company
no limit to shareholders
high cost of formation
what is social enterprise
produce and sell goods and services for a profit while fulfilling a social need
reinvest profits back into business
dont rely on donations as income
may get government funding as source of income
pro and con of social enterprise
help disadvantaged communities
high opportunity cost
what is government business enterprise
government owned and operate at both federal and state government levels
pro and con of government business enterprise
operate with independence
political interference in day to day operating
