1. Legal Types of Business
1) There are many different types of private business that you can set up.

2. Liability Very important
Looks at what happens to owners when debts / losses are made.
Unlimited liability – owners potentially could lose their house, car and personal savings to pay off debts
Limited liability – owners only lose the value of their investment, nothing else

3. Different Types UL = Unlimited Liability LL = Limited Liability
Partnership (UL)
Sole trader
(UL)
Types of Businesses
Private limited company ( Ltd) (LL)
Franchise
(Either LL or UL)
Public limited company (Plc) (LL)

4. Sole Traders These are the smallest types of business One owner
Can employ other people
Have unlimited liability
Lots of control, keep all profits, owner responsible for everything!
Used for business types such as – window cleaners, plumbers and other trades people.

5. Partnerships
Can have between 2-20 owners or partners. Usually in professional trades.
Silent partners – only invest £ - no say
Companies Act 1985 – can have more than 20 owners in solicitors and accountants
Good way to bring in extra skills and £
Deed of Partnership – can set out rules of business

6. Companies
Business has its own legal identity separate from the owners – INCORPORATED
The business is like a person and can be sued!
Owners are shareholders. Protected by limited liability
Two types –
Private limited Company (LTD) – shares only sold to selected individuals – family and friends
Public Limited Company (PLC) – shares are sold to anybody on the UK Stock exchange.