Legal ownership

Legal ownership

Sole Trader
1. Advantages
  1. No need to pay wages to employees if you work on your own
  2. All income goes to the manager
  3. Easy to set up
2. Disadvantages
  1. You need good business skills
  2. Illness or holidays would mean no income
  3. You are responsible for paying all debts, otherwise you could go bankrupt
3. Example: Tony Daws soccer school
Partnership
1. Advantages
  1. Partners can share skills and ideas
  2. The business will still operate if one partner is ill or away
  3. Problems can be discussed and other views taken into account
2. Disadvantages
  1. Profits must be shared
  2. Decision making is slower
  3. Partners may disagree or not contribute equally
3. Example: Intel
Private limited company
1. Advantages
  1. Banks are more willing to lend money
  2. The owners have limited liability
2. Disadvantages
  1. Shares in a private limited company can not be sold to the public
  2. Limited companies must comply with more laws and send their accounts to companies house each year
3. Example: Specsavers
Public Limited company
1. Advantages
  1. The company receives far more capital which can be used to grow the company
  2. Some of the profit, after tax, can be paid to the shareholders as dividends
2. Disadvantages
  1. If the shares fall in value, many shareholders may sell which lowers the value of the company
  2. An annual general meeting must be held each year and all shareholders are invited
3. Example: Microsoft
Franchise
1. Advantages
  1. Relationships with suppliers have already been established
  2. You can used a recognised brand name and benefit from any advertising that the franchisor makes
2. Disadvantages
  1. All profits are usually shared with the franchisor
  2. The franchisor might go out of business
3. Example: McDonald's

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	Created by James_Daws about 9 years ago