Types of ownership by Hannah

SOLE TRADER

haques6_2 — 2024-03-13 12:36:32 UTC

Definition

A solely trader is a self-employed person who owns and operates their own business independently. A solely trader business has no legal identity independent from its owner. ₍_{Johnathan Korchak, 2023)}

Example

a sole trader could be someone like Sarah, who runs a small bakery business independently.

Advantages

Control
As a sole trader, you’re in full control of your business, in the ultimate sense ‘your own boss’.
Operational flexibility
can make decisions alone, it can be quick and simple to make changes to the business to adapt to changing circumstances
Fewer statutory obligations
a sole trader has fewer statutory filing responsibilities than a limited company
Profit retention
As a sole trader you retain all the profits from the business, rather than having to share them with other shareholders

Disadvantages

Personal Liability
Sole trader businesses are not recognised as a separate legal entity, its liabilities and debts are your liabilities and debts.
Limited access to finance
As a sole trader, it can be very difficult to raise capital to expand the business.
Lack of business continuity
Problems can arise when a sole trader retires or dies
No one to share ideas with
all the important decisions will fall on you and there’s no one to share accountability with

Partnership limited and unlimited

hannahmountain725 — 2024-03-13 12:37:00 UTC

Definition:
A limited partnership is a business owned by two or more parties. These must include at least one general partner who runs the business and has unlimited liability for any debts. The limited partners have liability only up to the amount of their investment.

An unlimited partnership is a company with at least two persons participating in its business activities or in the management of its assets and being jointly and severally liable for its debts.

Advantages of Limited partnerships:
1) More funding available

2) Risk mitigation
Disadvantages of Limited partnerships:
1) General partners take on extra risk

2) Limited partners have little decision-making power
Example of limited partnerships:
Film production often involves the use of limited partnerships, which offer filmmakers financial backing while allowing them creative control over their projects. Limited partners provide funding without getting involved in the production process, giving producers autonomy to manage the filmmaking process smoothly. However, producers also bear more liability for project failures as general partners.

Company limited and unlimited

lauw6_2 — 2024-03-13 12:37:44 UTC

Public Limited Company(PLC):

Business that is managed by directors and owned by shareholders which can provide shares to the public and are allowed to sell or exchange stock on market.(CoCardless,2021)

Example:BA, HSBC Holding , Apple

Advantages:

more approach to assess capital

Good reliability

limited liability

Disadvantages :

increase the risk of being merged or acquired

unstable authorities

Private Limited Company

Example:Spotify

advantages:

low tax rates

disadvantages:

unable to exchange or sell stocks to the public.

Social Enterprise

lik49_2 — 2024-03-13 12:40:04 UTC