types of bus. organization

• Disadvantages of being a sole trader

  • No one to discuss business matters with
  • No Limited liability
  • Limited sources of finance
  • No continuity of business
• Disadvantages of Partnership

  • Unlimited liability
  • Unincorporated businesses
  • Shared profits
  • Limited business growth potential
• Advantages of being a sole trader

  • Few legal regulations: Few paper works when setting up the business
  • Complete control over the business
  • Close contact with customers
  • No profit sharing
  • Complete secrecy
• Advantages of Partnership

  • More capital available
  • Better decision making
  • Access to knowledge, skills, and experience
• Dividends are payments made to shareholders from the profits of the company. They are the return to shareholders for investing in the company
• Advantages of Private limited companies

  • Continuity of business
  • Raise capital
  • Greater status
  • Limited liability
• Disadvantages of Public limited companies

  • Legal formalities of forming
  • Expensive selling shares to the public
  • More regulations and controls
  • Potential loss of control for real owners
• Shareholders are the owners of a limited company. They buy shares which represent part ownership of the company
• Advantages of Public limited companies

  • Limited liability
  • Incorporated business
  • Large capital
  • No restriction on buying, selling, or transferring shares
  • Higher status attracting suppliers and banks
• Private limited companies are businesses owned by shareholders but they cannot sell shares to the public
• An unincorporated business is one that does not have a separate legal identity
• Disadvantages of Private limited companies

  • Legal formalities
  • Limited capital
  • Secrecy
  • Difficulty of selling shares