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Types of Business; Selection

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Type Of Business Selection There are a number of different types of business that need to be considered before the decision is made for which one is right for my business. First I will look at the positives and negatives of the different types before assessing them as a possibility for the business: Sole Trader There are a number of advantages of being a sole trader firstly you get to keep all the profit as you are the only owner of the business, it is also very cheap to set up compared to a number of the other types of business, As you are the sole owner of the business as well as keeping all the profits you also have full control of the business, and therefore are your own boss. An added bonus is that as a sole trader you can keep all your financial information private at the end of the financial year where as in some types of company it has to be released to the public. There are however a number of disadvantages to being a sole trader, the first being the same as an advantage, working on your ...read more.


However disadvantages of a partnership are that as there is more than just you, disagreements could break out, there is also less profit as it has to be shared across all partners, and unlimited liability is still a major disadvantage as if the business gets into trouble and owes money then all partners are accountable for it. After considering a partnership for my business I will leave it open as an option as I did with a sole trader. As I feel that many of the advantages could greatly help the business I plan to run. Private Limited Companies Finally there is another possibility in the form of a Private Limited Company, as with the first two types of business I described it has both advantages and disadvantages. The main difference is that private limited companies have their own legal identity and therefore limited liability for any owner/shareholder, which means that should the business fall into debt or similar they can not be held accountable for it, as the business has an identity of its own. ...read more.


I have already discounted this type of business as an option as for a company to become a public limited company it must have an issued share capital in excess of �50,000. Which my currently non-existent company does obviously not have. It is for this reason I have discounted a PLC as an option. Decision After assessing the advantages and disadvantages of all possible company types, I have decided that the type of business that would most suit my plans would be a partnership, as it would be cheap to set up and quite easy to run. Capital would be easier to obtain than as a sole trader, and each member of the partnership could bring a different section of expertise to the business. It also means that the work would be shared and things such as holidays could be taken as there is more than just one person. It would however be a difficult choice to select and find the right partner and should this not be available then I believe a sole trader would be the next best option, however I do feel that there would be plenty of possibilities to start a partnership and therefore this is what I will plan for. ...read more.

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