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Business ownerships can set up with different types, for example: Sole traders, Partnerships, Franchises, PLCs and Ltds.

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Introduction

Business Ownerships Business ownerships can set up with different types, for example: Sole traders, Partnerships, Franchises, PLCs and Ltds. Sole traders A sole trader is a business that is owned and controlled by one person. The advantages of Sole traders are the wage bill will usually be low, because there a few or no employees. It is easier to keep overall control, because the owner has a hands-on approach to running the business and can make decisions without consulting anyone else. Generally, only a small amount of capital needs to be invested, which reduces the initial start-up cost. A sole trader is easier to run the business than other types of businesses. And a sole reader can set up in business immediately. The disadvantages of being a sole trader are illness, long hours and difficulty of raising capital. ...read more.

Middle

There is less pressure of time on individual partners. The disadvantages of partnerships are the distribution of profits can cause problems. The deed of partnership sets out who should get what, but if one partner feels another is not doing enough, there can be dissatisfaction. A partnership has unlimited liability. And some partnerships have sleeping partners, if a sleeping partner decides to leave the business, the business might have problems with capital. Franchises Franchise is a business using the name, image and products of a larger, successful organisation. The advantages of franchise are you can use a recognised brand name and trade marks. You benefit from any advertising or promotion by the owner of the franchise. Financing the business may be easier. Banks are sometimes more likely to lend money to buy a franchise with a good reputation. ...read more.

Conclusion

Shareholders have limited liability. And it has cheaper borrowing and bulk purchasing. The disadvantages of PLCs are going public can be expensive. Risk of takeover by rival companies who have bought shares in the company. Some PLCs can grow so large that they may become difficult to manage effectively. A Ltd is a business that is unable to float its shares on the stock exchange, however it may issue its shares to friends, family and employees. The advantages of an Ltd are that shares can be sold to the general public unlike a private limited company and can help to raise substantial amounts of capital easily and are able to advertise in newspapers and on television whereas private limited companies are unable to do this. Easy and inexpensive to set up. And Small and less bureaucratic than PLCs. The disadvantages of Ltds are there is no benefit from economies of scale and if there is no share issue, they will lack capital. ...read more.

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