Types of retail organisations
Types of Retail Organisations
Sole Traders
- A sole trader is a business owned and operated by one individual.
- Sole traders have unlimited liability, meaning they can lose personal assets if the business fails.
- The benefits include control over business decisions and a simple set up process.
- Challenges include high financial risk and difficulties in raising capital.
Partnerships
- A partnership involves two or more people jointly owning and running the business.
- Partners have unlimited liability, but the risk is spread among several owners.
- They have shared decision-making power which can lead to disagreements.
- Partnerships allow for shared skills and resources but can have conflict dynamics.
Private Limited Companies (Ltd)
- Private Limited Companies (Ltd) have their shares privately held and not available to the public.
- Ownership is divided among shareholders, and each has limited liability.
- Ltd provides protection for personal assets and improved credibility.
- However, the financial information of the business must be made available for public scrutiny.
Public Limited Companies (Plc)
- Public Limited Companies (Plc) have their shares publicly traded on a stock exchange.
- Shareholders in a Plc have limited liability.
- Plcs have a greater capital raising potential, but risk diluting control over the business.
- Transparency requirements and regulatory scrutiny can be challenging.
Franchises
- A franchise is where a business owner (franchisee) buys the right to use an existing company's (franchisor's) brand and system.
- Franchisees benefit from established brands and corporate support.
- However, they have less freedom and control over the business and must share a portion of profits with the franchisor.
Co-operatives
- Co-operatives are businesses owned and run by their members, who share the profits.
- Members have equal voting rights, promoting fairness and cooperation.
- Co-operatives have a strong community focus, but can struggle with decision-making due to democratic processes.