Classifications of Business
- Created by: evemorrison
- Created on: 14-12-18 08:17
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- Classifications of business
- Franchise
- Sell a logo/brand or method of company to franchisee
- Most common in fast food sector
- Franchisor gets % of profits with little involvement
- Rent paid by person running franchise
- Low risk for franchisor
- Grows business quickly
- Can result in bad reputation for franchise
- Partnership
- Between 2 and 20 partners
- Each partner usually brings money
- Deed of partnership when setting up
- Must share profits
- More difficult to make unanimous decisions
- Share workload
- Private Limited Company
- Operate in private sector
- Exist to make a profit
- Limited liability
- Only assets of business liable, not personal assets
- Sell shares to family and friends
- Keep most financial aspects private
- Operate in private sector
- Sole Trader
- Most common
- Little red tape
- Inexpensive to set up
- Keep all profits
- Make all decisions
- Must be good at everything
- Heavy workload
- Public Limited Company
- Operate in private sector
- Exist to make a profit
- Limited liability
- Only assets of the business are liable, not personal assets
- PLC after name
- Larger
- Most well known
- Sell shares on the stock market
- Risk of losing majority ownership
- Must publish annual finance report
- Can attract investors
- Can reduce share price
- More red tape involved
- Operate in private sector
- Co-operative
- Business owned by members with equal voting rights
- Franchise
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