Unit1 P1
1Different types of business ownerships
PRIVATE LIMITED COMPANY (ltd)
A Company owned by shareholders. A limited number of shares are issued, these are owned by family and friends of the business. The business has limited liability
PUBLIC LIMITED COMPANY (plc)
A Company owned by shareholders. It must have £50,000 of capital when founded, and may allow its share to be bought by the general public (though it does not have to). The business has limited liability
UNLIMITED LIABILTY
A legal obligation on the owners of the business to pay all debts of the business. Even their personal possessions may be claimed.
LIMITED LIABILITY
Shareholders are only responsible for the company’s debts up to the value of their shareholding.
SOLE TRADING
In a sole trader business just one person owns the company and capital is raised by the proprietor himself, usually from a bank loan. This type of business carries with it a lot of paperwork, for example – accounts, ordering and assorted correspondence.
The business will always have unlimited liability. This means that if the enterprise fails the owner is responsible for all debts, and could end up selling all he/she owns to pay them off.
PARTNERSHIPS
In a partnership 1-20 partners own the company. Capital is raised by the partners themselves, or from a bank loan. There is a lot of paperwork to be done by the partners, for example – Deed of Partnership, certificates, and extra correspondence. All partners have unlimited liability. If the enterprise fails, or, say, if one partner is successfully sued, then all the partners are responsible for all debts. In addition, if one partner fails to pay income tax, (for example), the other partners may have to pay it for him/her, as well as to their own. Nowadays, many partnerships are also private limited companies.
LIMITED COMPANIES
In limited companies, the shareholders own the company.
There are two types of limited company – private limited companies (which use the suffix
PRIVATE LIMITED COMPANY (ltd)
A Company owned by shareholders. A limited number of shares are issued, these are owned by family and friends of the business. The business has limited liability
PUBLIC LIMITED COMPANY (plc)
A Company owned by shareholders. It must have £50,000 of capital when founded, and may allow its share to be bought by the general public (though it does not have to). The business has limited liability
UNLIMITED LIABILTY
A legal obligation on the owners of the business to pay all debts of the business. Even their personal possessions may be claimed.
LIMITED LIABILITY
Shareholders are only responsible for the company’s debts up to the value of their shareholding.
SOLE TRADING
In a sole trader business just one person owns the company and capital is raised by the proprietor himself, usually from a bank loan. This type of business carries with it a lot of paperwork, for example – accounts, ordering and assorted correspondence.
The business will always have unlimited liability. This means that if the enterprise fails the owner is responsible for all debts, and could end up selling all he/she owns to pay them off.
PARTNERSHIPS
In a partnership 1-20 partners own the company. Capital is raised by the partners themselves, or from a bank loan. There is a lot of paperwork to be done by the partners, for example – Deed of Partnership, certificates, and extra correspondence. All partners have unlimited liability. If the enterprise fails, or, say, if one partner is successfully sued, then all the partners are responsible for all debts. In addition, if one partner fails to pay income tax, (for example), the other partners may have to pay it for him/her, as well as to their own. Nowadays, many partnerships are also private limited companies.
LIMITED COMPANIES
In limited companies, the shareholders own the company.
There are two types of limited company – private limited companies (which use the suffix