Within the Automotive section of industrial technology most of the businesses are small usually in sole trader or partnership format and supply the local area with a service or product relating to the industries. Larger corporations are fewer but dominating the industry often supplying the small businesses with their products.
Sole traders make up the majority of business in the automotive industry many run out of small shops or some even from the home. Due to easy management and low start up costs this business setup is popular although this style of business organisation can be risky as sole traders have unlimited liability which means if they are unable to pay debts the ...view middle of the document...
A Partnerships can consist from anywhere between two and 20 people. Partnerships are often formed between relatives or close friends this distributes the workload and makes for easier management of other staff.
A partnership is also an effective way to reduce tax as each partner is taxed separately. Although each partner has unlimited liability and is responsible for not only their debts but their partners as well.
Partners are often separated into areas of the business e.g. Marketing, production, and retail (depending on number of partners) this divides the work effort into separate specialised sections and increases business efficiency.
Low start up costs Unlimited liability
Less start up costs than sole trader Liability for partners debts
Shared responsibility and workload Possibility of disputes
Pooled funds and talent Can be difficult to find a suitable partner
Minimal government regulation Divided loyalty and authority
No taxes of business profits
Business can continue if one partner dies
A company is a special type of business organisation that allows potentially thousands of people to become owners of the enterprise. Companies in the automotive industry usually are the largest business e.g. Jaycar, Ford, Holden, Dynamo and supply a product to smaller local businesses.
Whilst companies are of a significantly higher cost to form than a small business the shareholder or owner has limited liability and can only loose what they have invested in the company their personal finance is safe.