Getting started in business
Chapter 21
Sole trader business owned and run by one person
Has sole responsibility and takes care of all aspects of the business, they take
all financial risk when setting it up
If business fails the sole trader will be responsible for all the debts and may
have to sell their personal belongings to pay them (unlimited liability)
Advantages Disadvantages
- Quick and easy to set up - Long hours
- Keep all profits - Unlimited liability
- Work your own hours - Responsible for every aspect of the
- Quick decisions can be made business
- Satisfaction of work done - Must make all the decisions
- May not have all necessary skills
required
Partnership formed between two and twenty people who carry on business together with a
view of making a profit
e.g. doctors, dentists, solicitors and accountants
Advantages - Losses can be shared, less risk
- More capital available as more people Disadvantages
involved
- Disagreements can occur as too many
- Better decision making as problems
people have an opinion
can be discussed
- Profits must be shared
- More skills and experience available
- Unlimited liability
Private limited company (Ltd.) company set under the companies act 2014
It is owned by between one and 149 people (shareholders)
*any company that is a private limited company has initials, Ltd. after its name*
Includes:
- Articles of association
- Memorandum or association
- Form A1
*once these documents have been sent to the registrar of companies you will receive the
certificate of incorporation
Chapter 21
Sole trader business owned and run by one person
Has sole responsibility and takes care of all aspects of the business, they take
all financial risk when setting it up
If business fails the sole trader will be responsible for all the debts and may
have to sell their personal belongings to pay them (unlimited liability)
Advantages Disadvantages
- Quick and easy to set up - Long hours
- Keep all profits - Unlimited liability
- Work your own hours - Responsible for every aspect of the
- Quick decisions can be made business
- Satisfaction of work done - Must make all the decisions
- May not have all necessary skills
required
Partnership formed between two and twenty people who carry on business together with a
view of making a profit
e.g. doctors, dentists, solicitors and accountants
Advantages - Losses can be shared, less risk
- More capital available as more people Disadvantages
involved
- Disagreements can occur as too many
- Better decision making as problems
people have an opinion
can be discussed
- Profits must be shared
- More skills and experience available
- Unlimited liability
Private limited company (Ltd.) company set under the companies act 2014
It is owned by between one and 149 people (shareholders)
*any company that is a private limited company has initials, Ltd. after its name*
Includes:
- Articles of association
- Memorandum or association
- Form A1
*once these documents have been sent to the registrar of companies you will receive the
certificate of incorporation
