| Advantages | Disadvantages |
| 1. Only a relatively small amount of capital is needed to start up the business. 2. The owner works for him or herself. 3. Decisions can be taken quickly. 4. Profits are not shared. | 1. Unlimited liability – could lose everything. 2. If the owner dies or is ill, hard to continue the business. 3. Difficult to obtain extra capital for expansion. 4. May lack ideas, as less people to ask. |
Partnership
| Advantages | Disadvantages |
| 1. More capital available 2. Each partner can specialise on a particular task. 3. Range of ideas available. 4. Partners can share any losses (and profits!) 5. Accounts need not be published. | 1. Unlimited liability 2. Action of one partner binding on others 3. May be problem of continuity on the death of a partner or if disagreement among partners 4. Capital may still be difficult to raise |
Private Limited Company
| Advantages | Disadvantages |
| 1. limited liability 2. Still more capital available as more owners (shareholders) 3. Company has its own legal identity so can continue beyond a death or disagreement 4. Accounts need only be published in brief form | 1. Less control for owners than in sole trader/ partnership 2. Capital less easy to raise than in public limited company as shares cannot be sold to general public |
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| TYPES OF BUSINESS | | | Study carefully the meaning of the following phrases and word combinations to avoid any difficulty in understanding the following text. |