Business Ownership Options

• What is a Sole Trader

  • One person owns the business
• What is a Partnership?

  Between 2 and 20 people own the business
• What is a Public Limited Company (PLC)?

  Lots of people own the business by buying shares
• What is a Private Limited Company (LTD)?

  Selected people own the business by buying shares
• What is a Not-for-profit Organization?

  • Profits are re-invested into the business, not shared between owners
• What are Co-operatives

  • Owned by individual "members" not large "investors" or "shareholders". You also vote on decisions in the company.
• What are Public-Private Partnerships?

  • A mix of public and private sector organisations working together on a project.
• Advantages of a Sole Trader

  • Keeping all the profit
  • Being in full control
  • You make all the decisions
  • Easy to set up
  • They are their own boss
  • Information about company kept private
  • Quick decisions
  • Offer personal attention to customers
• Disadvantages of a Sole Trader

  • You have to invest all your money
  • You may lack experience in certain areas leading to bad decisions
  • Unlimited liability
  • Difficult to raise money
• Advantages of a Partnership

  • Different opinions and ideas
  • May have expertise in fields where you lack
  • You don't have to invest all your money
  • The work load is split
  • Easier to raise money
• Disadvantages of a Partnership

  • Ideas may conflict
  • You have to split the profit
  • Unlimited liability
  • Control of business
• Shares Outstanding

  -Shares the company made and sold to investors for money or some other exchange.
• Share Dilution

  • Reducing the relative size of the asset. E.g. Creating new shares, the existing shares become relatively smaller.
• Asset

  • Something of value that holds its value
• Advantages of Private Limited Companies (LTD)

  • Limited Liability
  • Anyone can invest making opportunities to increase capital easier.
  • Bring in expertise
  • Shares cannot be bought by public
  • Has its own legal status
  • Can employ managers to run business
• Disadvantages of Private Limited Companies (LTD)

  • Less of a say due top diluted shares
  • Accounts of the company cannot be kept private
  • Cannot sell shares on the stock exchange, which limits the amount of capital it can raise.
  • More difficult and expensive to start up
• Advantages of Public Limited Companies (PLC)

  • Easiest way of gaining capital
  • Shareholders have limited liability
• Disadvantages of Public Limited Liability

  • Shareholders bring little to no benefit to the company (excluding capital).
  • Accounts of the company cannot be kept private.
  • Must have an annual general meeting (AGM)
• Advantages of Co-operatives

  • Many members with a lot of capital and ideas
  • Helps employee motivation
  • Democratic way to run a business
• Disadvantages of Co-operatives

  • It makes it harder to make decisions & inefficient
  • Time consuming
  • Owners have limited profit return
• Advantages of NGOs

  • Ethical (attracts donations/purchases)
  • Independent from the government (tax-free)
• Disadvantages of NGOs

  • Hard to generate capital
  • No dividence (profits are re-invested)