Main Types of Business Ownership Essay -- Business and Management Stud

Different types of ownership of profession ranging from the simple to the complex. Here I will cover the main types, outlining the advantages and disadvantages of each leading to a decision on which type of ownership is most appropriate for my business.Types of ownership==================There atomic number 18 many different types of ownership of business ranging fromthe simple to the complex. Here I will cover the main types, outliningthe advantages and disadvantages of each leading to a decision onwhich type of ownership is most appropriate for my business.Sole Proprietors================A sole proprietor, or sole trader, is the name given to someone whoruns the business by themselves. This is ordinarily someone who isparticularly skilled in one area or had a very good and grocery storeableidea. There are many advantages and disadvantages to view up a soleproprietorship.Advantages==========Sole proprietorships often require less capital to start up than thebigger businesses. T his is because they are usually smaller and dropless staff to start with. This cost is minimal and often only a a few(prenominal)hundred pounds.Sole proprietorships are easy to set up, few forms and licenses requestto be obtained and the business can start almost straight away,resulting in less time being unemployed. The only official form youneed to fill in is a inland revenue form for use when calculatingincome tax, it also entitles you to many tax advantages outlinedlater. Of course you need to put out a business plan, complete withcashflow forecasts etc but this was it.These businesses are easy to maintain and run. This is because theowner has little or no oppositon for her ideas and plans. Also, it ispossible for the owner to act as their own accountant, saving themlots of money.The owner has an increased level of control, they have the rite tochange the business whenever they feel like it and have the advantageof not having to call shareholder meetings.One of the largest a dvantages is the allocation of profits. Unlikelarger companies sole proprietorships dont need to distribute profitamongst its shareholders. All profit goes directly to the owner, whodoes with it as he or she sees fit.Because of the owners status as a sole trader, she does not need topublish her accounts. Therefore she can keep her business priv... ...large amounts of debt then the ownerswould not be obliged to pay off any of that personally. This is a bigbonus to the company as it is a great deal easier to attract potentialinvestors who are not unstrained to risk unlimited liability. These arethe main advantages of becoming a limited company, and while theydont seem much they are actually a huge bonus.Disadvantages=============A limited company has to display information to the public at the endof every fiscal year. Some companies may not want so much informationreleased. It can also be fairly expensive, costing a minimum of 700 ayear to prepare a report.Complying with the rules of the London stock convince is also a bigdisadvantage to any limited company and very costly. However companiescan list themselves in the alternative investment market (AIM). Thisis quite a lot cheaper but is seen as more risky by prospectiveemployers. This can make it quite hard for a business to attract newshareholders.Suitability===========Overall I think this is the most suitable choice for my business. Thisway I am likely to attract more investors plus I would not have tosuffer from unlimited liability.