Types of

Business
Organisation
s
Presented
by: Kairavi Submitted
to; Ms
Twinkle
 Forms Of Business Organisations
Private sector

Limited Joint Franchise

Sole Trader Partnership
Companies Venture

Private Limited
Company

Public Limited
Company
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 Sole Trader
A Sole Trader is a business owned and managed
by one person.

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Advantages and Disadvantages
Advantages Disadvantages

 easy to set up  Unlimited Laibility

 makes all  Not be able to raise
decisions funds
 has complete
 have to work long
control
hours
 keeps the profit
 difficult to compete

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Partnership
s
A business formed by two or
more people who will usually
share responsibility for the day-
to-day running of the business.
Partners usually invest capital in
the business and will share
profits.

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Advantages and Disadvantages

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 Limited
Companies
Limited companies are
incorporated business in
which liability of
shareholder of the
company is limited to what
they have invested in the
company.
Private limited company:
Owned by shareholders who have limited liability. The
company cannot sell its shares to the general public.

“
Public limited company:
Owned by shareholders who have limited liability. The
company can sell its shares to the general public

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 Similarities Differences
 Legal documents  Owners
 Shareholders invest by  Size
purchasing shares  Sale of shares by the
 Ordinary Shareholders company
are the owners of the
 Control
company and profit
 Raising additional
belongs to them
 Can raise finance by capital through share
selling shares issue
 Profit is shared  Borrowing finance
between the
shareholders through
dividends 9
Disadvantages
 The legal formalities of setting up a
business are very costly
 Director decisions are sometimes
influenced by major investors.
 The company is always at the risk of
takeover.
 The legal requirements for the
publication of information about the
company are very strict
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Franchise
A business system in which a
firm already has a successful
product or service called the
‘franchisor’ agrees to allow
another business called the
‘franchisee’ to use franchisor’s
trade name, logo and
products.
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 Benefit
s Limitation
 Less chance of
failure s
 The cost of
buying franchise
 Provides advice can be very
and training
expensive
 will finance the
 Percentage of
promotion of the
brand revenue or
 The franchisor will profits will be
already have taken
checked the quality  Strict controls
of suppliers.  Will have to pay
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local promotions
 Main reasons are:
 Reduces risk of each business and cut costs
 Brings different expertise
JOINT
 Market and product knowledge can be shared VENTURE
Two or more
Limitations: businesses agree to
work together on a
 May damage the reputation of all firms in joint project and set up a
venture.
 May have different cultures of leadership, making separate business for
decision-making difficult this purpose.

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Unincorporated business Incorporated business

• Do not has separate • Has separate

legal identity legal identity

• Owners are responsible for • not the owners (Shareholders)

all activities of business. are legally responsible

• Have unlimited • Have limited

liability liability

• For examples: Sole traders,

• For example: easyJet
partnerships.
Plc. , Mother Diary.

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THANKS
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