Why a business might change its Form of Ownership
To meet the assessment objectives of this task I am going to discuss the smallest of my 3 businesses which is No. 31 Hair and Beauty. This business is a sole trader ship and the owner has one branch in Finsbury. She wants to expand to remain competitive and service more clients and offer more products. To do this she will need more money and more staff. She is also considering opening
g a new salon. So I am going to
She can look at two options:
She could decide to choose a partnership to do this she will need to complete a deed of partnership whereby she confirms the exact law of partnership and confirms the exact liability basically a mutual contract.
The Advantages of her choosing a partnership are that mainly through expansion of her company this would mean for her higher income and higher capital she would not find it as daunting to run original salon as before; as the work would be shared between her and her partners. And with that comes financial backup and security; if major financial fallout was to occur to her company her personal funds and items will be protected she can run her company with up to around 30 partners with this it will bring different knowledge and skills to her business and even though its partnership her business and account records stay private
The owner however needs to be aware that once she is in a business partnership she will not be able make decisions solely by herself and will rather need to consult her fellow business personnel
Remain own boss but has to have a turnover of more than £50,000.
The owner might choose to change the ownership to a limited company for a number of reasons mainly for security there is limited liability if you change from a sole trader; there is no danger of her losing
For the owner to turn to a limited company there are certain things she will have to take into account...