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Describe In Detail And Compare Different Types Of Businesses, Highlighting The Similarities And Differences Between Them.

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Introduction

Describe In Detail And Compare Different Types Of Businesses, Highlighting The Similarities And Differences Between Them. Sole Traders and Partnerships Sole traders are sometimes known as sole proprietors. A sole trader is a type of business owned by one person. A partnership is a type of business owned by a minimum of two people and a maximum of twenty people. Examples of sole traders and partnerships are a small newspaper stand and doctors / lawyers. Both these businesses are unincorporated businesses which means they both have unlimited liability, which means the owner of the business is liable for debts of the business. Personal possessions such as cars and houses may have to be sold to raise money to pay off the debts of the business. Unincorporated businesses also have tax on profits, which means that income tax is paid on the profits, which the business may make. Their financial information can only be viewed by the owners of the business and lastly, they can go bankrupt which is the term used to describe when unincorporated businesses "go bust" (when the debts or liabilities are greater than assets). ...read more.

Middle

* Largest and most powerful type of business. * Gain economies of scale (where the costs of production decrease as more is made). Disadvantages of public limited companies are: * Costs a lot of money to set up (cost of incorporation). * They have to make their financial information available to the general public and other businesses. * Shareholders receive a share of the profits in the form of a dividend. * Because shares can be bought and sold freely on the stock exchange it is possible for other companies to buy up a large quantity of shares and the business over. A private limited company is a medium/ large sized business, which is also owned by shareholders. It is normally identified by the word limited or Ltd somewhere in the name of the business. An example of an Ltd is McDonalds. These are the advantages of private limited companies: * Shares - These can be issued or bought by friends or family only as a way of raising money for the business to use. ...read more.

Conclusion

Both of which unincorporated businesses do not have/ cannot do. The financial information of incorporated businesses is available to shareholders and the public if they want to see it, which is the opposite from the unincorporated businesses. Lastly, incorporated businesses have insolvency which is the term used to describe when incorporated businesses "go bust" (liabilities or debts are great than assets). Shares, Dividends and the Stock market Shares can be issued or bought by friends or family in unincorporated businesses but in incorporated businesses they can also be bought on the stock market as a way of raising money for the business to use. Shareholders receive a share of profits in the form of a dividend, which is proportionate to the money that they invested. A dividend is an amount of money given the a shareholder to say "thank you" for investing and buying shares. On the stock market, people buy shares in the hope that they will make money but people can also lose a lot of money. Shelley Bligh-Wall Page 1 of 5 02/05/2007 ...read more.

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