A business owned, controlled and financed by one person although this business might employ several people.
e.g. Plumbers & builders
Advantages- Easier to set up
Don't have to share profits
Disadvantages- Can't sell shares, work long hours, liable for all debts.
A business which had bought the right to trade under an established name e.g. KFC, starbucks.
Advantages- Low start up capital , Enhanced visability, Grants permission to sell products
Disadvantages- Potential for conflict, Outsiders have right to use trademark , Loss of direct control
They can have a good start up and can expand. They can pay a high rent.
Can be between two and twenty people. They can share skills and the workload. It may be easier to raise capital needed.
Advantages- Can share skills and workload
Disadvantages- May have disagreements with partner, profits will be shared.
Opportunites- Cheap way to expand
They need to compile a formal agreement to reduce the risk of conflict. Important to be clear about the rights and responsibilites of each partner so the business can run smoothly.
These tend to be smaller than public limited one and are often family businesses. There must be at least two shareholders but there is no maxinum number. e.g. Tufton.
Advantages- A LTD status ensures that the business will continue to trade if something happens to the partners offering more stability.
Has limited liability so if business fails; the owners will not loose their personal posessions.
Disadvantages- Costs more to run and set up. This can affect the profitability of the business.
Banks are more keen to lend money to private ltd companys.