Forms of Business Organisation (Chapter 3 pg. 30 to pg. 45) – When setting up as an enterprise are different structures you can take. Type of enterprise Advantages Disadvantages Liability Sole Trader Easy to You have unlimited liability. Unlimited This is an enterprise Get to keep all the profit. Lack of specialisation. liability owned by 1 person. Get to make all the The hours will be long. decisions. Partnership Spreads the risk. May be disagreements and Unlimited This is an enterprise More people with different conflict. liability by 2 to 20 people. specializations. Limited Companies Limited liability. Not as easy to set up as a sole Limited This is an enterprise Easier to raise finance. trader are more Liability – owned by shareholders. Tend to be large well regulations. There are 2 types of recognized enterprises. You have to pay 2 types of tax. limited company private (LTD) and public (PLC) Franchise 88% of franchises are You have to pay a % of your Limited This is an enterprise in profitable. profit each year to the Liability a sole trader can You get support from the franchisor. pay an existing business franchisor when you start You cannot choose what you to use their name and the enterprise. sell. sell their product for a The enterprise may already The more well known the fee. be well known. enterprise is the more expensive the start-up fee will be. Co-operatives People the Decision making can be slow. Limited These are enterprises business will also be the The owners may lack the skills Liability that are either workers owners as well and needed to run an enterprise. by the workers or the therefore they may work customers. harder to make the enterprise a success. A joint venture Sharing of costs The profits have to be shared Each This is when two or Sharing of risk Disagreements may occur business more businesses to knowledge Different business cultures has start a new project own together, sharing the liability capital, the risks and depending the profits. on their
Forms of Business Organisation (Chapter 3 – pg. 30 to pg. 45) When setting up as an enterprise are different structures you can take. Type of enterprise Advantages Disadvantages Liability Sole Trader This is an enterprise owned by 1 person. Easy to Get to keep all the profit. Get to make all the decisions. You have unlimited liability. Lack of specialisation. The hours will be long. Unlimited liability Partnership This is an enterprise by 2 to 20 people. Spreads the risk. More people with different specializations. May be disagreements and conflict. Unlimited liability Limited Companies This is an enterprise owned by shareholders. There are 2 types of limited company private (LTD) and public (PLC) Limited liability. Easier to raise finance. Tend to be large well recognized enterprises. Not as easy to set up as a sole trader – are more regulations. You have to pay 2 types of tax. Limited Liability Franchise This is an enterprise in a sole trader can pay an existing business to use their name and sell their product for a fee. 88% of franchises are profitable. You get support from the franchisor when you start the enterprise. The enterprise may already be well known. You have to pay a % of your profit each year to the franchisor. You cannot choose what you sell. The more well known the enterprise is the more expensive the start-up fee will be. Limited Liability Co-operatives These are enterprises that are either workers by the workers or the customers. People the business will also be the owners as well and therefore they may work harder to make the enterprise a success. Decision making can be slow. The owners may lack the skills needed to run an enterprise. Limited Liability A joint venture This is when two or more businesses to start a new project together, sharing the capital, the risks and the profits. Sharing of costs Sharing of risk knowledge The profits have to be shared Disagreements may occur Different business cultures Each business has own liability depending on their
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