Enterprise · Both
Business Ownership
The legal structure of a business affects risk, control, finance and liability.
Main types
• **Sole trader** – one owner; full control; unlimited liability
• **Partnership** – two or more owners sharing responsibility
• **Private limited company (Ltd)** – shareholders; limited liability; more regulation
• **Franchise** – trade under an established brand for fees/royalties
Limited vs unlimited liability
Unlimited liability: owners can lose personal assets if the business fails.
Limited liability: owners only risk the money they invested in shares.
Choose structure based on risk, growth plans and desire for control.
Worked example
Why might a growing firm become an Ltd?
Solution: To raise capital via shares and protect owners with limited liability.
Practice questions
1. What is unlimited liability?
2. Name two advantages of a franchise.