Business Enterprise
The Business Enterprise Environment
Ownership, Liability and Size
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Ownership, Liability and Size
Ownership
- Sole Trader: This is a business that is owned and operated by one person. They are completely responsible for the business and may employ others to work for them.
- Partnerships: Here a business is owned by two or more people. Each partner shares the responsibilities, risks, and benefits of the business.
- Limited Companies: These businesses are legally separate from the people who run them. Ownership is divided into shares which can be bought and sold.
Liability
- Unlimited Liability: This relates to sole traders and partnerships where owners are personally liable for all the financial obligations and debts of the business. This means their personal assets could be seized if the business fails.
- Limited Liability: Limited companies have limited liability meaning that if the business fails, the owners are only liable up to the amount they invested. Their personal assets cannot be taken to settle business debts.
Size
- Micro Businesses: These are the smallest kind of business, typically have fewer than 10 employees, and often just one.
- Small Businesses: These have fewer than 50 employees and are larger than micro businesses.
- Medium-Sized Businesses: These businesses have between 50 and 250 employees. They are larger than small businesses but smaller than large businesses.
- Large Businesses: These businesses are usually corporations with more than 250 employees. They're often international in scale.
Remember, size, ownership, and liability will all affect the goals, operation, and impact of a business. For instance, larger businesses have different financial and legal considerations compared to a sole trader or partnership.