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  • Comparison of Different Business Models

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    Beth King
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    The document compares different business models including sole traders, partnerships, limited liability partnerships, and private limited companies. Sole traders and partnerships are easier to start but provide unlimited personal liability. Limited liability partnerships and private limited companies provide limited liability but have higher set-up costs and ongoing reporting requirements. Each model has advantages and disadvantages depending on factors like liability, control, flexibility, and financial disclosure obligations.

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    Comparison of different business models

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    The document compares different business models including sole traders, partnerships, limited liability partnerships, and private limited companies. Sole traders and partnerships are easier to start but provide unlimited personal liability. Limited liability partnerships and private limited companies provide limited liability but have higher set-up costs and ongoing reporting requirements. Each model has advantages and disadvantages depending on factors like liability, control, flexibility, and financial disclosure obligations.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Download as docx, pdf, or txt
    18 views2 pages

    Comparison of Different Business Models

    Uploaded by

    Beth King
    The document compares different business models including sole traders, partnerships, limited liability partnerships, and private limited companies. Sole traders and partnerships are easier to start but provide unlimited personal liability. Limited liability partnerships and private limited companies provide limited liability but have higher set-up costs and ongoing reporting requirements. Each model has advantages and disadvantages depending on factors like liability, control, flexibility, and financial disclosure obligations.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    Comparison of different business models

    Model Structure Advantages Disadvantages


    Sole trader  The sole trader is the  Can start trading immediately  Unlimited personal liability
    exclusive owner of the  There are no setup  Contracts are formed
    business. costs/formalities between the sole trader and
     It is not a separate legal  Can keep all the profits third parties
    entity.  Full control over decision
    making
     Complete privacy as no
    disclosure requirements
    Partnership  2 or more persons own the  Can start trading immediately  Partners have unlimited
    business and share the  There are no setup personal liability
    profits. costs/formalities  Contracts are formed
     The partnership is not a  Full control over decision between the partners and
    separate legal entity making third parties
     Complete privacy as no  A partnership agreement will
    disclosure requirements be required otherwise the
    Partnership Act 1890 will
    apply in default
    Limited liability partnership  2 or more persons carrying  All partners have limited  There are set-up costs and
    on a business. liability formalities as an LLP must be
     The partnership is a separate  The partnership can enter registered at Companies
    legal entity contracts with third parties House
     Flexible management  Must file annual accounts
    procedures and has disclosure
    obligations
     A members’ agreement will
    be required otherwise the
    provisions of the Limited
    Liability Partnership
    Regulations 2001 will apply in
    default.
    Private limited company  A company is a separate legal  Limited liability as  There are set-up costs and
    entity distinct from its shareholders are only liable formalities as a company
    owners to pay any amount unpaid on must be registered at
    their shares. Companies House
     Minimum of 1 person  Extensive disclosure
    required to incorporate a obligations
    company  The Companies Act 2006
     Easier to raise finance imposes strict requirements
    on how companies are run.

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