Y11 BM -Types of business

Emily runs a florist shop by herself. She manages everything and keeps all the profit, but is also responsible for paying off any debts personally.

• Emily is a sole proprietor.
• Emily is a corporate shareholder.
• Emily is a franchise owner.
• Emily is a limited liability company.

Two sisters run a small bakery together. They split profits and both make key business decisions.

• The sisters are business partners.
• The sisters are employees of a bakery.
• The sisters are competitors.
• The sisters are family members but not partners.

GreenTech Pty Ltd is owned by five investors. Their liability is limited, and ownership is based on private shares.

• GreenTech Pty Ltd is a partnership owned by two investors.
• GreenTech Pty Ltd is a sole proprietorship owned by one investor.
• GreenTech Pty Ltd is a public limited company owned by five investors.
• GreenTech Pty Ltd is a proprietary limited company owned by five investors.

FreshWear Ltd sells clothing and is listed on the ASX. It has thousands of shareholders and a board of directors.

• FreshWear Ltd is a sole proprietorship.
• FreshWear Ltd is a private company.
• FreshWear Ltd is a public listed company.

• FreshWear Ltd is a non-profit organization.

Tom is a personal trainer who operates his own business. He rents a gym space and files personal tax returns for all income.

• Tom is an employee of a gym.
• Tom is a fitness instructor for a company.
• Tom is a sole-trader.

• Tom is a gym owner.

SafeBuild Pty Ltd builds small homes. It’s owned by three partners who invested capital, and the company is registered with ASIC.

• SafeBuild Pty Ltd is owned by five partners.
• SafeBuild Pty Ltd is a private limited company owned by three partners.

• SafeBuild Pty Ltd is a sole proprietorship.
• SafeBuild Pty Ltd is not registered with ASIC.

This type of business can have many (100s or more) of owners

• Sole Proprietorship
• Partnership
• Corporation

• Limited Liability Company

The owner gets to keep all the profit individually.

• Sole Trader

• Partnership

• Corporation

• Government business enterprise

What is the main difference between a sole trader and a partnership?

• A sole trader has unlimited liability, while a partnership shares liability

• A sole trader must register their business, while partnerships do not need to.
• Partnerships are always larger than sole traders in terms of revenue.
• A sole trader can have multiple employees, while a partnership cannot.

What is the advantage of a 'Ltd' over a sole trader?

• Multiple owners

• Limited liability

• Unlimited liability

• More profitable