Types of business ownership

Types of business ownership

1. Sole trader

   • 1 owner
   • Small size
   • Unlimited liability

2. Partnership

   • Requires a deed of partnership
   • Unlimited liability
   • Owned by 2-20 people (called partners)
   • Small to medium size

3. Private limited company

   • Owned by shareholders who can only be family/friends
   • Controlled by a board of directors
   • Limited liability
   • Medium to large size

4. Public limited company

   • Limited liability
   • Controlled by a board of directors
   • Large to extra large size
   • Profit paid to shareholders in dividends
   • Shares can be bought and sold on stock exchange

5. Franchise

   • An arrangement in which a business can trade in the same style as an existing business
   • Franchisee must buy franchise from franchisor
   • Usually a % of sales must be paid to franchisor called 'royalty'