Advantages | Disadvantages |
Sole Proprietorship |
1. Low set-up costs
2. Efficient and flexible operations
3. Close relationship with customers
4. Close relationship with employees
5. Low profit tax rate
6. Easy transfer of ownership
7. Not need to disclose financial info.
8. Owner enjoy all profit
| 9. Unlimited liability
10. Heavy workload
11. Lack of specialization and skills
12. Lack of continuity
13. Lack of capital sources(4th)
14. Competition from large business
15. Heavy burden of unavoidable costs
16. Difficult to get bank loans
|
Partnership |
5. Low profit tax rate
11. Division of labour
13. More source of capital(3rd)
15. Sharing business risk
17. Better chances of promotion
| 2. Lower operational efficiency
9. Unlimited liability (X limited partners)
12. Lack of continuity
18. Conflicts on decisions
|
Private Limited Company |
7. Not need to disclose a lot of info.
9. Limited liability
12. Has continuity
13. Easier to raise capital(2nd)
14. Large in scale
19. Better control
20. Less accounting costs
| 2. Lack of operational efficiency
5. Higher profit tax rate
6. Difficult to transfer shares
|
Public Limited Company |
6. Easy to transfer shares
9. Limited liability
12. Has continuity
13. Easier to raise capital (1st)
14. Large in scale
16. Easier to get bank loans
21.Separation of ownership & management
| 2. Lack of operational efficiency
5. Higher profit tax rate
7. Need to disclose a lot of information
19. Less control
22. Easily affected by external factors
|
Joint Venture |
11. Shared expertise
13. More capital
14. Economies of scale
15. Sharing risk
23. Easier entry into new markets
24. Synergetic effect
25. Lower production costs
| 18. Disagreement among partners
26. Leaking of information
27. Loss of autonomy
|
Franchisor |
14. Dominate market
25. Lower production costs
| 19. Difficult to control quality
28.Image & reputation damaged by only 1 franchisee
|
Franchisee |
3. Close relationship with customers
17. Reduced promotion cost
23. Easier entry into market
29. Training and financial support
| 1. High initial capital
8. cannot solely own profit
27. Low degree of autonomy
|
Government Departments |
13. Financial support by government
14. Economies of scale
25. Lower operation costs
30. Reasonable prices to public
31. Easier access to updated information
| 2. Low degree of efficient & flexibility
32. cannot respond to public needs
33. Increase burden of taxpayers
34. Not run on commercial basis
|
Public Corporation |
13. Financial support by government
14. Economies of scale
25. Lower operation costs
30. Reasonable prices to public
31. Easier access to updated information
| 2. Low degree of efficient & flexibility
32. cannot respond to public needs
|