Types of Private Sectors | Advantages| Disadvantages| Features| Sole Traders| * It is easier to set-up a business. * You can make all the decisions * You keep all profits the profits. * Accounts and records can be kept private. * They can provide specialist services. * They can also respond to customer’s needs and queries faster. | * They have unlimited liability. * Money can become very difficult to obtain. * Costs and prices are usually higher than the competition. Holidays can become very difficult to take. * Illnesses can shut the business, unless a friend or relative take over. * Owners may have to take longer hours. | Sole Traders are in complete control of the direction they take their business in; they decide their own aims and objectives and choose how they would achieve them. | Partnerships| * They are also easy to set-up, although a Deed of Partnership would be recommended * Responsibilities and decisions are shared, although this could become a disadvantage. Accounts can also be kept private. * All of the partners invest money. | * Unlimited Liability, except for Sleeping Partners and LLP’s. * Money can become difficult to obtain. * If there is a disagreement in the business, then this could be a major problem. * There is a limit in the maximum number of partners. * A lot of problems can occurs when the partner leaves. | Partnerships are owned between two and twenty, each person in the business has a say in what direction the business goes in.

They all decide on goals and aims, which could take very long if the partners, disagree with each other. | Private LimitedCompanies(LTD)| * Gets money from selling shares * Firm is usually bigger * Shareholders have limited liability * Usually employs specialists * Death & Illness won’t affect the running of the company * Shares can be given to family | * Accounts are not private * The company is incorporated so it is a separate legal company * More expensive to set-up * Have to share profits by paying Dividends. Not all decisions are made by owners * Shares can’t be sold on the stock market| Limited Companies are only usually for big firms because they have the benefit of given the firm a separate legal entity so if it somehow fails, than the owners would not have to pay for the business’s debt with their own money. | Franchises| * There is a better hance of success * It’s easier to borrow money * Most problems will have been overcome already * Support is available from the franchiser * Free advertising, paid by the franchisor * Franchisees are usually small so they are easier to manage| * The franchise can easily be taken back by the franchisor * The franchisee cannot make all the decisions * Cannot sell the franchise without franchisor’s permission * Have pay royalty payments to the franchisor * Supplies have to be purchase by selected suppliers * Have to give a portion of the profits to franchisor| Franchises allow small businesses use their name so becoming a franchise is good because of the instant popularity. | PublicLimited Companies(PLC)| * Gets money from selling shares * Firm is usually bigger * Shareholders have limited liability * Usually employs specialists * Death & Illness won’t affect the running of the company * Shares can be given to workers to motivate them | * Accounts are not private * The company is incorporated so it is a separate legal company * More expensive to set-up * Have to share profits by paying Dividends. Not all decisions are made by owners * Can be taken over| Limited Companies are only usually for big firms because they have the benefit of given the firm a separate legal entity so if it somehow fails, than the owners would not have to pay for the business’s debt with their own money. | Co-operative| * Finance can be raised by the members * Buying in bulk reduces cost * Members have limited liability * Members are more likely to work harder since they get shares of the profit * Limited Liability| * It might take longer to make decisions * More members means more profit-sharing * The value of the share decreases in value the more members| A Co-operative is a brilliant way to get into a business with others and have limited liability, you work your share, like others, and get percentage of profits. |