What are the kinds of business?
There are different kinds of business which can be started.
- Sole Traders: These are the most common kind of businesses which can be found. In this there will be the business owner who is responsible for the business and everything that happens. The owner in this kind of business is called a proprietor. In this business model the proprietor uses his own funds to start and then run the business. However, when the business grows, the model usually changes to something else.
- Partnership – this kind of business is started when two or more people come together and run the business. In this model, the partners share the debts, profits and all of the decisions.
- Company – this is also called a joint stock company and this consists of various people who together form a joint stock. These people are called shareholders as they own a share in the business. They also share the profits. The company however is considered as a separate legal entity and it is different and separate from the members or shareholders. The company as it is a separate entity can be sued, make a loss of profits as well as is responsible for the actions of the employees.
- Private limited companies – these are small businesses and these have shares which are available only to few people like family members. These shares cannot be bought on the stock market.
- Public limited companies are those companies that have more than a single director and have a trading certificate. These public limited companies can sell the shares to anyone on the stock market as well as buy them.
- Franchises – This is a business model where the good name of the business is traded off. Customers buy from the business as they are aware of the brand and the business has to pay the franchisor fees.