TYPES OF BUSINESS OWNERSHIP

Features Liability Advantages Disadvantages

1) • A business owned by • Unlimited • All profits go to • All risks/losses
SOLE TRADER one person only. Liability him. go to him.
• Capital  from own • Unlimited • Small capital to • Require long
savings, bank loan, liability start-up. working hours
borrowings from means • Makes decision and hard work.
family/friends. owner is himself (quick). • Unlimited
liable to lose • Full control of Liability +
his personal business. Explain.
belongings • Easy to form
in order to and manage.
settle
business
debts.
2) • A business owned by 2 • Unlimited • Losses can be • Disagreement • Partnership Agreement
PARTNERSHIP or more but not more Liability shared among may arise among • Partnership Act
than 20 people (Ordinary partners. partners.
(partners). partnership) • More ideas and • Capital is limited
• Capital  partners’ • Limited knowledge can by number of
capital, bank loan. Liability be contributed. shareholders.
(Limited • Workload can • Unlimited
partnership) be shared. Liability +
• More capital for Explain.
business
expansion.
• Easy to form.
3) LIMITED • Business owned by 2 • Limited • To register, limited
COMPANY  50 shareholders. Liability company must submit:
a) PRIVATE • Owned by family (Liability of 1)Memorandum of
LIMITED members, friends, shareholder Association (objective
COMPANY business associates. is limited to of business).
(‘Sdn Bhd’/ • Do not sell shares on the amount 2) Articles of
‘Pte Ltd’) Stock Exchange. of shares he Association (how
hold) business is run).
b) PUBLIC • Business owned by 2 • Limited To the Registrar of
LIMITED  Unlimited number Liability Company.
COMPANY of shareholders. • Once approve,
(‘Plc’/ ‘Ltd’) • Owned by public. Certificate of
• Sell shares on Stock- Incorporation will be
Exchange. issued.
• ________________ 
an invite for public to
buy shares.
• ________________ 
profit of limited
company.
• ________________ 
capital of limited
company.
• ________________ 
owners of limited
company.
• ________________ 
people who manage
the limited company.