Incorporated vs Unincorporated

• How can businesses in the private sector be categorized?

  Incorporated and unincorporated businesses
• What are the characteristics of unincorporated businesses?

  • Owner is the business
  • No legal difference between owner and business
  • Owner has unlimited liability
  • Most operate as sole traders or partnerships
• What type of liability do owners of unincorporated businesses have?

  Unlimited liability
• What is the main form of unincorporated business?

  Most operate as sole traders
• What are the characteristics of incorporated businesses?

  • Legal difference between business and owners
  • Company has a separate legal identity
  • Owners (shareholders) have limited liability
  • Most operate as private limited companies
• What is the legal status of incorporated businesses?

  They have a separate legal identity
• What type of liability do owners of incorporated businesses have?

  Limited liability
• What is the most common type of incorporated business?

  Private limited companies
• What is a smaller number of incorporated businesses that operate as?

  Public limited companies
• What are the key differences between incorporated and unincorporated businesses?

  Incorporated:

  • Separate legal identity
  • Limited liability for owners

  
  

  Unincorporated:

  • No legal difference from owner
  • Unlimited liability for owner