Study Notes
Different Forms of Business (Overview)
- Level:
- AS, A Level
- Board:
- AQA, Edexcel, OCR, Eduqas, WJEC
Last updated 7 Aug 2019
Businesses in the private sector can be categorised in two main ways: (1) incorporated and (2) unincorporated businesses.
Unincorporated:
- The owner is the business - no legal difference
- Owner has unlimited liability for business actions (including debts)
- Most unincorporated businesses operate as sole traders
- A small number operate as partnerships
Incorporated:
- There is a legal difference between the business (company) and the owners
- The company has a separate legal identity
- Owners (shareholders) have limited liability
- Most incorporated businesses operate as private limited companies
- A smaller number operate as public limited companies
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