Setting up and Organising a new business.

There are several types of business I would be able to set up as. These options are to set up as a sole trader, partnership, private or public limited company or franchise.

The main advantages of setting up as a sole trader are that I would be my own boss, decide what happens to the profits and it would be cheap and easy to set up. However, sole traders work longer hours, have unlimited liability and are unincorporated. Partnerships, on the other hand, have more owners, so there is more likely to be conflict between owners and each partner is legally responsible for what the other partners do. Also, partnerships, like sole traders, are unincorporated and have unlimited liability. The main advantage of a partnership is that there are more owners, therefore more ideas, more people to share the work and more capital can be put into the business. Division of labour is also an advantage in partnerships. The advantages of a limited company are that they are unincorporated and have limited liability. However, they are more expensive to set up and are legally obliged to publish their accounts every year. (The advantages a public limited company has over a private limited company are that they have more capital to help them to expand and diversify. However, it is easy for someone to take over the company and most shareholders would have little say in how the company is run.) The last option, a franchise, has one main advantage: I would already be selling an established product or service, making a franchise less of a business risk. However, only the products of the franchise may be sold; so there is less freedom.

The type of business I will be choosing is a partnership. The reasons behind this choice are that as I would not be the only owner, more capital is available, whereas if I chose to be a sole trader, only the capital I invest would be available to my company. It is cheap and easy to set up, unlike a limited company, which would involve a lot more capital being invested and various legal papers. I decided against a franchise as there would be much less freedom. Possibly the main factor for my decision is the fact that I would not be the only owner, meaning more capital could be invested and I would not bear all responsibility for decision-making.

The business that I am going to set up as will be a sole trader. The reasons for this are that I would have total control over the business; I will be able to make all business decisions independently and it will be easier and cheaper to set up than most businesses.