A2 Influence of Aims and Objectives on Ownership
Types of ownership may include sole trader, partnership, private limited company, public limited company or non-profit. Different ownership types have different levels of risk, for example sole trader and normal partnerships have unlimited liability. As ownership is opened up to more people such as through selling shares in private and public limited companies, there can be more knowledge, ideas and investment. However, the original owners loses some control.
Businesses may change their ownership over time due to a range of reasons. Sole traders may take on a partner for additional investment, to bring in new skills and ideas and to share the workload. Partnerships may convert to a limited company to increase investment and gain limited liability status. Private limited companies may become public limited companies as it is a much faster method of raising finance.
