A sole trader is a business owned by ____ person. They are usually ____ in size. Hairdressers, ____, and electricians often operate as sole traders. Sole traders rely on their own ____, bank loans or loans from friends and family to ____ their business. Sole traders keep all the profit they make for ____. They also get to run the business as they see fit, making all the key ____ by themselves. However, they have unlimited liability which means they are personally responsible for all business ____. Sole traders take on all the risks of starting their own business and have the disadvantage of unlimited ____. A sole trader is liable for the organisation’s debt. This means that personal assets such as a car or ____ are at risk of being sold to pay off business debts. To keep labour costs to a minimum they will often avoid delegating tasks such as purchasing or advertising to others, preferring to ____ money by doing the work themselves. Sole traders can only raise limited finance. They might get a bank loan but only if the bank is ____ that the sole trader’s business plan will work. Partnerships can have a minimum of ____ and a maximum of 20 partners. Lawyers, real estate agents, doctor and dental practises often operate as partnerships. The deed of partnership document sets out the ____ of the partnership. For example, it states how much money each partner ____ in the partnership and what role each partner will have in the partnership. Partnerships can raise more ____ than sole traders. ____ are more likely to lend money to an organisation that has many partners than to a sole trader. Partnerships have equal liability for business ____. Partners can share the ____ and responsibility of the business between them. Partners may ____ and argue about the future direction of their business. In contrast, a sole trader has the ____ of being the only decision maker. Any profit made is ____ between two to twenty people. A sole trader has the advantage of receiving all profit. Like sole traders, partnerships have ____ liability. All partners have the worry of being liable for any business debt the partnership has. Private limited companies have ____ liability, meaning an investor only loses the initial stake if a company goes ____. In law, a private limited company is separate from the people who own it. Its finances are separate from their personal ____. Because limited companies have their own legal ____, their owners are not personally liable for the firm's debts. The ownership of a limited company is divided up into equal parts called ____. Whoever owns one or more of these is called a shareholder. Private limited companies are owned by one or ____ shareholders. Quite often these shareholders are supportive family members. Profits are ____ between shareholders. They receive this as a ____. Limited companies can raise ____ by borrowing and through the share issue of ordinary shares. If the company fails, the investors in a limited company are ____ by the rules of limited liability. Limited companies must be ____ with ASIC. The legal set up costs are ____.

Checkpoint: Sole Trader, Partnerships and Private Limited Company

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