Corporations have limited liability , so shareholders only lose the money they invested if the business can’t pay its debts. Corporations can be public or private. Public corporations allow anyone to buy or sell shares. They may be listed on the Australian Securities Exchange (ASX). Private corporations, often family-owned, restrict who can buy shares. Public companies must have ‘Limited’ (Ltd) after their name, while private companies use ‘Proprietary Limited’ (Pty Ltd).
TABLE3 Advantages and disadvantages of a corporation Advantages
Disadvantages
Attract ýnance by selling shares
Complex to establish and set up
Can continue after an owner of the business sells their shares
Strict laws outline the operation of corporations
Large corporations can become very inefýcient
16.3.3 Alternative forms of business ownership Sole proprietorships, partnerships and corporations are not the only ways to run a business. A business can also be a cooperative, owned by the people it serves, or a trust, where someone manages property for the members. After choosing a type, a business owner can also run their business as a franchise.
Cooperative
In a cooperative, people come together to share resources for a common goal. Common examples include farmers, community education centres, and credit unions. Cooperatives help members use their expert knowledge to manage their work and reduce costs by working together. One example is the Dairy Farmers Milk Co-operative, which describes itself as ‘farmers helping farmers’. It has over 200 members from more than 100 farms across Australia, supplying over 150 million litres of
FIGURE5 The Dairy Farmers Milk Co-operative is an example of a farming cooperative.
milk each year to Bega Dairy & Drinks. There are many types of cooperatives for different purposes, like housing, consumers and workers. Retailers’ cooperatives buy in bulk to get discounts, helping local grocery stores, hardware stores and pharmacies. Franchise A franchise isn’t a form of ownership, but it’s a popular way to run a business. A franchisor is the person or group that gives others the right to use their business name and products. The franchisee is the person who buys the franchise by paying a fee. Franchisees can run their business as a sole proprietorship, partnership or corporation.
556 Jacaranda Humanities Alive 7 Victorian Curriculum Third Edition
Made with FlippingBook interactive PDF creator