Appropriate Legal Structure
A sole trader is one person who owns a business.
The pros about being a sole trader are you get to make your own decisions, you work long hours but you get to keep all the profit you make rather that having to give it to workers.
The cons are that all the responsibility is yours so you have no one else to help you if something happens. Another con is that you have to work long hours to get the profit you want. The last con is unlimited liability which is if you go into too much debt they can take your personal belonging like your house and stuff from inside your house.
A partnership business is a business owned by 2-20 people which work together.
The pros are that you won't have to handle everything by yourself and you have less chance of losing the business.
The cons are that you will get less money and you won't get too make your own decisions but you will have to make shared decisions.
Private Limited Company (LTD)
A private limited company is a business owned by family and friends. The pros are you can raise more money, gain more customers and limited liability.
Public limited company (PLC)
A public limited company (PLC) is a company that is owned by the public. You can raise more money and have limited liability.
Shares and shareholders
Shares and shareholders are people who own a small part of the business.
Unlimited and Limited Liability
Responsible for all debts you could lose all your possesions.
Why change a legal status?
There are a few reasons why a company might change their legal status these are..
-If they have enough money too.
-So they can get more money.
-So the business can grow if its successful.
Real life examples:
PLC- Coca Cola is a public limited company.