in this video i'll be talking about the different types of business organizations first let's look at some key terms our first definition is limited liability and it is when owner is responsible for the debt of a business and it's limited to only the amount invested on the other hand we have unlimited liability and it is when owner is responsible for the debts of a business and it's not limited to the amount invested for example their house or personal assets could be taken away next we have incorporated business and it is a business with a separate legal identity whereas an unincorporated business is a business without a separate legal identity and then we have shareholders and these are the owners of a limited company they buy shares of the company which represents a percentage of the ownership moving on to business organization in the private sector so we have sole traders partnerships private limited companies public limited companies franchise and joint ventures now let's talk about sole traders so assault trader is business owned by one person only and it is an unincorporated business this business structure is useful to new businesses business who don't need a lot of capital and business who's dealing with mainly the public so now let's look at the advantages of being a sole trader first of all it is easy to set up they are their own boss so they have complete control over the business they also have close relationships with the customers and they are able to keep the business information private however there are some disadvantage to being a sole trader they have unlimited liability their social finance is limited to the owners savings profit made by the business and small bank loans and there's also no continuity when the owner dies the business is likely to remain small because of it next we have partnership and a partnership is a business owned by two to twenty people and it is also an unincorporated business so this business structure is useful to business without legal complications industries such as medicine or law reforming companies is not allowed and for partners that know each other very well a partnership requires a partnership agreement which is a written legal agreement between business partners so the content of a partnership agreement includes amounts of capital invested by each partner the task to be done by each partner how the profits will be shared how to handle absence retirement and admitting new partners so the advantages of being in a partnership is that there's more capital invested responsibilities are shared between partners risk and losses are also shared between partners and it is easy to set up however the disadvantage of being in a partnership is that they have unlimited liability there is slow decision making caused by disagreements between the partners and there's no continuity if one of the partner dies if a partner is inefficient it also affects the other partners and now we have private limited company so a private limited company is a business owned by shareholders and shares cannot be sold to the public this business structure is useful to family businesses and business or partnership that wants to expand so a private limited company must have an article of association which are rules of how the company will be managed and they also need a memorandum of association which is important information about the company now let's look at the advantages of a private limited company so first of all they have more capitals from the shares sold they have limited liability there is continuity after death of a shareholder and because it's an incorporated business they have a separate legal identity now the disadvantage of a private limited company is that the shares cannot be sold to the public it is difficult to transfer shares their account is available for the public to see and it is also difficult to set up due to legal formalities now let's look at public limited company so it is a business owned by shareholders and the shares could be sold to the public so they have annual general meeting which is a legal requirement for public limited company the shareholders attend and vote on who to be in the board of directors for the coming year the advantages of a plc includes that they are able to sell their shares to the public they are able to have rapid expansion they also have limited liability they have continuity after death of a shareholder there is no restriction of buying selling or transferring shares and because it is an incorporated business they have a separate legal identity however the disadvantage of a plc is that there is divorce between ownership and control selling shares to the public is expensive overexpansion makes it harder to control and manage accounts are also available for the public to see it is also difficult to set up because of legal formalities and there's dangers of business takeover due to public shares now you may be wondering what is divorce between ownership and control firstly you have the shareholders which are the owners they attend the annual general meeting they also vote for the board of directors who make all the important decisions and they also appoint managers for day-to-day business decisions as you can see the shareholders do not control the company all the decisions are made by the board of directors and the managers something to keep in mind is that we use the word company when referring to a public limited company or a private limited company we do not use it for a sole trader or partnership now let's look at joint ventures so a joint venture is two or more business starting a new project together showing the capital risk and profit the advantages of a joint venture is that the risks are shared the costs are also shared which is good for expensive projects and have shared knowledge from the business on the other hand the profits are also shared and there's different methods of running business which could lead to disagreements over important decisions moving on to franchise a franchise is a business based on an existing business or brand using its brand name promotional logos and trading methods so in a franchise there are two main individuals which are the franchisor and the franchisee the franchisor are the main business or brand the franchisee are the individuals starting up a franchise now the advantages of a franchise to a franchisor is that the franchisee buys license to use the brand name the management of outlets is the responsibility of the franchisee the products sold are controlled and this would allow them to grow rapidly however the disadvantage of a franchise to a franchise is that poor management by the franchisee could lead to a bad reputation a franchisee keeps the profits earned from the outlet now let's talk about the advantages of a franchise to a franchisee there are low chances of business failure as well and products are being sold the franchisor pays for advertising supplies come from the franchise there are fewer decisions to be made such as prices and products sold the cost of training employees are also covered by the franchisor and more banks are willing to lend loans to franchise due to low risk so the disadvantage of a franchise to a franchisee is that they have less independence maybe they are unable to make decisions that would suit their local market the license fee and a percentage of the annual turnover should also be paid to the franchisor and now i'm going to talk about the business organization in the public sector so we have public corporations and these are business in a public sector that is owned and controlled by the government their capital are from taxpayers examples of public corporations include education hospital and public transport