Business Organisations

Public Limited Company * A public limited company is the largest type of business. These companies end their names with plc, the shares are usually traded on the stock exchange and can be owned by members of the public and institutional investors such as large banks and insurance companies. This type of business can raise a large amount of money by selling shares and use this to expand or develop the enterprise. All shareholders have limited liability. Limited liability is when the shareholders (owners of the company) are legally responsible for the debts of a company, only the value to their shares.

Advantages: * Shares can be advertised * Shares can be sold through the stock exchange * Cheaper borrowing and bulk purchasing * The companies name is protected * The company continues despite the death, resignation or bankruptcy of management and members * Employees can acquire shares

Disadvantages: * Going public can be expensive * Some plc's so large that they become difficult to manage effectively * Risk of takeover by rival companies who have bought shares into the company. * Market goes up and down so it’s a gamble * Extra work involved with dealing with investors. * Public limited companies become plc’s because they can sell shares on the stock exchange which will bring in a lot of income. This can be used to expand the business. The bad thing of becoming a plc is you could lose ownership if you sell the majority of the shares. * An examples of PLC is Tesco’s, ITV and British Airways.

Sole trader
A sole trader is a business which is run and owned by one legal person and they are a self-employed person, but they are the sole owner of their business. The sole trader is the most popular way of running a business in the UK. A sole trader has unlimited liability, the