Sole trader

A sole trader is a self-employed person who owns and operates their own firm as an individual

is known as a single trader. Since a sole proprietorship lacks a distinct legal identity from its

owner, many people believe that the sole proprietor is also the business. In this post, we'll

examine what a sole proprietor is, how to become one, and your ongoing duties.You have

complete control over your business, its assets, and its profits after taxes as a single proprietor.

This business model also provides a lot of other benefits, such as flexibility and comparative

simplicity, in addition to this control. Characteristics of a sole trader:Continuity,Minimal admin

and filing requirements,Privacy and Full control

Advantages

● you’re the boss

● you keep all the profits

● start-up costs are low

● you have maximum privacy

Disadvantages

● you have unlimited liability for debts as there’s no legal distinction between

private and business assets

● your capacity to raise capital is limited

● all the responsibility for making day-to-day business decisions is yours

● retaining high-caliber employees can be difficult

 Partnership

A partnership is an arrangement between two or more people to oversee business operations and

share its profits and liabilities. In a general partnership company, all members share both profits

and liabilities. Professionals like doctors and lawyers often form a limited liability

partnership.Each person contributes money, property, labor or skill, and shares in the profits and

losses of the business. Characteristics of Partnership:Sharing of profits and losses,Mutual

agency,Unlimited liability,Lawful business. and Contractual relationship

Advantages

● Your business is easy to establish and start-up costs are low.

● more capital is available for the business.

● you'll have greater borrowing capacity.

● high-caliber employees can be made partners.

Disadvantages

● the liability of the partners for the debts of the business is unlimited

● each partner is ‘jointly and severally’ liable for the partnership’s debts; that is, each

partner is liable for their share of the partnership debts as well as being liable for all the

debts

● there is a risk of disagreements and friction among partners and management

● each partner is an agent of the partnership and is liable for actions by other partners
 Public Ltd Company

A public limited company is the legal status of any firm which has offered shares to members of

the general public and in turn owns a limited amount of its own shares. A PLCs stock or

company share is presented to the general public and can be purchased or claimed by any

individual, either privately during the process of the initial public offering or via trades on the

stock exchange market. Public limited firms are also known as publicly held

companies.Characteristics :Directors,Limited Liability,Paid-up Capital and More capital

Advantages

● Raising Capital Through Public Issue Of Shares

● Widening The Shareholder Base And Spreading Risk

● Other Finance Opportunities

● Growth And Expansion Opportunities

● Prestigious Profile And Confidence

● Transferability Of Shares

● Exit Strategy

Disadvantages

● Volatile Stock Markets. It's no secret that the stock market can be volatile at times.

● Potential For A Loss Of Control. In any PLC, the shareholders have some control over

the business, albeit small.

● Strict Regulations.

● Increased Scrutiny
 ● Vulnerability To Takeovers.

Private Ltd Company

A private limited company, is a type of privately held small business entity, in which owner

liability is limited to their shares, the firm is limited to having 50 or fewer shareholders, and

shares are prohibited from being publicly traded. A company becomes an independent legal

structure when it incorporates.Characteristics of Private Ltd Company:Number of

directors,Limited liability,Perpetual succession and authorized and paid-up share capital

Advantages

● Limited Liability.

● Tax Efficient.

● Separate Legal Entity.

● Easier To Raise Capital.

● Easier To Maintain.

● Flexible Management Structure.

● Professional Image.

● Protection From Creditors.

Disadvantages

● One of the main disadvantages of a Private Limited Company is that it restricts the

transferability of shares by its articles.

● In a Private Limited Company the number of shareholders, in any case, cannot exceed 50.
 ● Another disadvantage of a Private Limited Company is that it cannot issue prospectus to

the public.

● In the stock exchange shares cannot be quoted

Cooperatives

Cooperatives are businesses owned by “member-owners”. Co-ops are democratically controlled

by their member-owners, and unlike a traditional business each member gets a voice in how the

business is run. Services or goods provided by the co-op benefit and serve the member

owners.Characteristics of Cooperatives:It is a form of business organization,It is owned by the

members who make all the broad policy decisions,It is democratically controlled, that is

everyone has an input in the making of decisions and iIt provides goods or services to the

members.

Advantages

● there are equal voting rights for members

● this structure encourages member contribution and shared responsibility

● liability for members is limited

● there is no limit on the number of members

Disadvantages

● members have equal voting rights regardless of investment - which may not suit an

investor-driven business

● legal limits on payments of dividends on shares may not suit an investor-driven business
 Transnational Corporation

A transnational corporation is an enterprise that is involved with the international production of

goods or services, foreign investments, or income and asset management in more than one

country. It sets up factories in developing countries as land and labor are cheaper there.They seek

competitive advantage and maximization of profits by constantly searching for the cheapest and

most efficient production locations across the world.

Advantages

● creation of jobs.

● stable income and more reliable than farming.

● improved education and skills.

● investment in infrastructure, eg new roads – helps locals as well as the TNC.

● help to exploit natural resources.

● a better developed economic base for the country.

Disadvantages

● fewer workers employed, considering the scale of investment.

● poorer working conditions in some cases.

 ● damage to the environment by ignoring local laws.

● profits going to companies overseas rather than locals.

● little reinvestment in the local area.

Joint Ventures

A joint venture is a combination of two or more parties that seek the development of a single

enterprise or project for profit, sharing the risks associated with its development. The parties to

the joint venture must be at least a combination of two natural persons or entities.Parties,No

Separate Law, Duration and Create Synergies.

Advantages

● access to new markets and distribution networks.

● increased capacity.

● sharing of risks and costs (ie liability) with a partner.

● access to new knowledge and expertise, including specialized staff.

● access to greater resources, for example, technology and finance

Disadvantages

● The objectives of the venture are unclear.

● The communication between partners is not great.

● The partners expect different things from the joint venture.

 ● the level of expertise and investment isn't equally matched.

● the work and resources aren't distributed equally.

Franchises

A franchise is a method of distributing products or services involving a franchisor, who

establishes the brand's trademark or trade name and a business system, and a franchisee, who

pays a royalty and often an initial fee for the right to do business under the franchisor's name and

system.License: The franchisee gets the right to use, franchisor's trademark under a license.

Policies: The franchisee must follow the policies concerning the mode of conducting business, as

stated in the agreement.

Advantages

● Business assistance

● Brand recognition

● Lower failure rate

● Buying power

● Profits

● Lower risk

● Built-in customer base

● Disadvantages
 ● Loss of Control

● Training and Continued support of franchisees

● Poorly Performing Franchisees
●
● Compliance cost and Risks
●
● Managing Growth

Nationalized Industries

Nationalization is the process of taking privately-controlled companies, industries, or assets and

putting them under the control of the government. Nationalization often happens in developing

countries and can reflect a nation's desire to control assets or to assert its dominance over

foreign-owned industries.A nationalized industry does not have shareholders like the private and

public company or the cooperative. When an industry is nationalized, shareholders are given

government stock in return for their shares. They will receive interest on this stock whether the

industry makes a profit or a loss.

Advantages

It helps to check exploitation

It ensures steady supply of essential services

Encourages efficient use of resources

Protection of strategic industries

Ensures equitable distribution of resources

Disadvantages

1.Low productivity and inefficiency

2. Prevention of private initiatives: When the government takes over private business, there is

every likelihood that private initiatives will also decrease. This can also be due to lack of

competition.

3. Consumers can be exploited

4. Corruption and mismanagement: