The Types of Business Ownership
This report is about the advantages and disadvantages
of different types of
I am going to write about the advantages and disadvantages of
different business ownerships including:
* Sole Trader
I will include the definitions of some of the business ownerships.
Sole trader, as the name suggests, is where an individual is the sole
owner of a business. The business is often quite small in terms of
size (as measured, for example, by sales generated, or number of staff
employed) however the number of these businesses is very large indeed.
Examples of these businesses can be found in most industrial sectors
but particularly in most service sectors. Hence services such as
electrical repair, picture framing, photography, diving instruction,
retail shops, and hotels have a large proportion of sole trade
* A sole trade business is easy to set up. No formal procedures are
required and operations can often commence immediately (unless special
permission is required because of the nature of the trade or service,
such as running licensed premises).
* The owner of a sole trader business can decide the way in which the
business is to be conducted and has the flexibility to restructure or
dissolve the business whenever it suits. The law does not recognise
the sole trader as being separate from the owner and so the business
will cease on the death of the owner.
* Other advantages include having complete control over the business
and its profits; you are able to use any money the business brings as
you deem fit without having to justify you're spending. However, as
the expansion of the business depends on the amount of capital you are
personally able to inject, you may find as a sole trader that
investing in the growth of the business very difficult, as capital is
often not easy to find.
* As a result of the inability to assist expansion, your competitors
would have the edge over your sole trader business; for example,
businesses with greater access to investment would be able to adapt
more quickly to market demands leaving you struggling to compete.
* The pressure put upon the sole trader must not be ignored, and if
you are thinking of becoming self-employed as a sole trader you must
address this issue as it could ultimately threaten the survival of
* Apart from the pressures placed on the sole trader by the larger
organisations, you are also fully liable financially, and the need for
your business to examine the implications and consequences of
bankruptcy or loss of personal possessions due to the individual
accepting unlimited liability must also be...