Definitions of different types of trading

Re:Definitions of different types of trading


Here are some very simple definitions;

Sole Trader; one builder with a small business. If he goes bust, he's personally liable for his business debts

Partnership; two or more builders with a small business. If they go bust, they're personally liable for their business debts

Limited Company; builder(s) that want certain legal protections afforded to having limited status. The company is owned by private shareholders (typically directors, but can however be anyone who's made a private investment) and if it goes bust, the sharholders are not personally liable for their business debts as long as they've fulfilled their fiduciary duties to the company

Public Limited Company; builders that have floated on the stock exchange and are owned by - and answerable to - public shareholders

Conglomerate; http://en.wikipedia.org/wiki/Conglomerate_(company)

Multinational; http://en.wikipedia.org/wiki/Multinational_corporation

Public Corporation; see Public Limited Company

Franchise; a builder who may open a small shop that forms part of a larger chain. Although he will own his part of the business, he will almost certainly be 'handcuffed' into exclusively using products supplied by the larger company and/or pay royalties/fees to them. Fast food outlets such as Dominos Pizza are typically franchises while the franchisee himself may choose to set up as a limited company!

Regards,

Robert

Re:Definitions of different types of trading


Fair enough, but I did say my descriptions were simple and not meant to be overly long! I've slightly reworded my definition above without wanting to go into the executive/non-executive thing otherwise it'll turn into paragraphs!

Regards,

Robert