Lim Sei cK

A sole proprietorship is a business entity owned by one person who is legally responsible for the debts and taxes of the business

 Ownership: 1 owner  Life: Ends when owner: - Is unable to carry on, - Dies, or - Closes the firm Responsibility for business debts if firm is unable to pay: Owner

 Total control  Cheap and easy to start up  Keep all the profit  Business affairs are private

 Unlimited liability  Can be difficult to raise finance  Can be difficult to enjoy economies of scale, i.e. lower costs per unit due to higher levels of production  There is a problem of continuity if the sole trader retires or dies

 Ownership: 2 or more  Life: Ends when partner(s): - withdraws, - Dies, or - Closes the firm Responsibility for business debts if firm is unable to pay: Partners individually and jointly

 Amount each partner will contribute  Percentage of ownership of each partner  Share of profits of each partner  Duties each partner will perform  Debts- the responsibility each partner has for the partnership’s debts

 Spreads the risk across more people  Partner may bring money and resources to the business (e.g. better premises to work from)  Partner may bring other skills and ideas to the business  Increased credibility with potential customers and suppliers

 Have to share the profits.  Less control of the business for the individual.  Disputes over workload.  Problems if partners disagree over of direction of business.

 A company / corporation is a publicly or privately owned business entity that is separate from its owners and has a legal right to own property and do business in its own name; stockholders are not responsible for the debts or taxes of the business

 Ownership: Can be thousands  Life: Continues indefinitely; ends when: -business goes bankrupt -stockholders vote to liquidate Responsibility for business debts if firm is unable to pay: Stockholders can lose only the amount invested

 Limited liability  Easier to raise finance  Stable form of structure  Provides more privacy of information than an public limited company

 Greater admin costs  Public disclosure of company information (annual report & accounts + annual return)  Directors’ legal duties (set out by Companies Act)

 The objectives are normally more focused on the members of the co-operative, the local community and the world community. Profit is not the primary objective.

 Achieve a common purpose.  More power to buy or bargain

 A long, drawn out decision-making process  Co-operatives may find it difficult to raise finance  Idealistic and ethical aims may not be agreeable with all members  The aims held by many co-operatives may not lead to profits in the long run