1. Understanding Business Structures

2. Types of Business Structure Sole Trader Partnership Limited Companies Co-operatives Franchises

3. Benefits include: Easy to set up and run Only small amount of capital needed Owner has total control and doesn’t have to share profits Sole Trader  Benefits

4. Drawbacks include: Unlimited liability Lack of economies of scale The business relies on the owner 100% Sole Trader  Drawbacks

5. Partnership  Benefits Benefits include: Shared responsibility Allowing partners to specialise Partners bring in more capital investment Decisions, costs are shared

6. Drawbacks include: Each partner has unlimited liability Shared responsibility can lead to disagreements Profits have to be shared according to Deed of Partnership Partnerships  Drawbacks

7. Limited Companies There are two types: 1. Private Limited Company (Ltd) 2. Public Limited Company (Plc)

8. Private Limited Companies Benefits include: Company can raise more capital by selling more shares Shareholders can keep control of the business

9. Private Limited Companies Drawbacks include: Accounts must be audited Limited companies are more difficult to set up Shares cannot be sold publicly on the stock market

10. Public Limited Companies Benefits include: Easy to raise capital for expansion by selling shares on the stock market Economies of scale are better than a private Ltd company

11. Public Limited Companies Drawbacks include: Expensive to set up (a lot of capital is required) Annual accounts must be made public Anyone can buy shares – so it’s vulnerable to takeovers

12. Co-operatives There are two types: 1. Worker Co-operatives 2. Consumer Co-operatives

13. Worker Co-operatives… …Are owned by the whole workforce …Everyone has a say in the business

14. Consumer Co-operatives… …Are local Co-op shops owned by the customers …The profit is paid out or used to keep prices down

15. Franchises An existing company (the franchisor) lets someone else (the franchisee) use its business idea and name The franchisee buys a licence to carry out the business of the franchisor The franchisee must also run the business in the same way as the franchisor In return, the franchisor helps the franchisee set up the business

16. Business.govt.nz provides free access to a wide range of resources, including tools and interactive content. It acts as a gateway to government and private sector business information, news and services. Next steps: Find out more with Business.govt.nz: Overview of business structures Understanding business structures Focus on sole traders Focus on partnerships Focus on companies