Types of business

sole trader
1. Laws governing set-up
  1. no laws
2. Number of owners
  1. owned by 1 person
3. Legal entity
  1. Owner and business seen as the same
4. Accounting entity
  1. Business and owners financial records to be kept seperate
5. Profits distribution
  1. Drawings
6. Liability of owners
  1. unlimited liability- owner is liable for all business debts
7. Life of business
  1. life of business is limited to length of time owner operates it
8. Business operators
  1. Owner
9. Name of owner
  1. Owner
partnership
1. Laws governing set-up
  1. Partnership Act 1908
  2. Limited Partnership Act 2008
2. Number of owners
  1. 2-25 people
    1. Up to 125 for certain partnerships
3. Name of owners
  1. Partners
4. Business operators
  1. Partners
5. Legal entity
  1. Partners & business seen as the same
6. Accounting entity
  1. Business & partners' financial records to be kept seperate
7. Liability of owners
  1. Unlimited - partners are liable for all business debts
  2. Limited - only liable if their investment if unpaid
8. Life of business
  1. Limited - dissolves if a partner leaves or dies unless an agreement states otherwise
9. Profits distribution
  1. Drawings
company
1. Laws governing set-up
  1. Companies Act 1993
2. Business operators
  1. Board of directors & managers - depends on size of business
3. Number of owners
  1. Minimum: -1 person. -1 shareholder. -1 director.
4. Profits distribution
  1. Dividends
5. Liability of owners
  1. Limited - shareholders only liable for value of unpaid shares (unless personally guaranteed as a debt)
6. Life of business
  1. Indefinite for as long as it is financially viable and people want to operate it
7. Legal entity
  1. Shareholders seen as separate from the company
8. Accounting entitty
  1. Business and shareholders' financial records to be kept separate
9. Name of owners
  1. Shareholders

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Types of business

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