Types of businesses

Sole Trader: This is the simplest form of business owned and managed by one person. The sole trader has unlimited liability, meaning the owner is personally responsible for any losses made by the business.
Partnership: A partnership is a type of business in which two or more people share the ownership. Each partner contributes resources and shares in the profits and losses.
Private Limited Company (Ltd): A business structure where the company is a separate legal entity from the owner, meaning personal assets are protected if the company goes into debt.
Public Limited Company (Plc): A large business with shares traded publicly on the stock market. Shareholders have limited liability and the company has a legal identity separated.

Ownership and Liability

Unlimited Liability: In business forms like sole traders and partnerships, the owners are personally liable for the business’s debts. If they cannot pay, their personal assets, such as house or car, could be claimed to cover debts.
Limited Liability: For private and public limited companies, the owners, who are shareholders, are not personally liable for the company’s debts. Their liability is limited to the value of their investment in shares.

Sole Traders and Partnerships have simpler setup process and greater control over the business. However, raising finance can be difficult and the risk of unlimited liability is high.
Private Limited Companies offer protection of limited liability and easier financing but require legal formalities and the accounts are public.
Public Limited Companies can raise large amounts of capital through public share sale, but they have legal obligations and their operations are open to public scrutiny.

The type of business can impact various stakeholders including employees, customers and suppliers.
For example, in a sole trader or partnership business, employees may have more personal relationships with the owner, while in a limited company, employees may have less direct contact with the top management.
Customers of a sole trader or partnership may receive more personalised service, while customers of a public limited company might benefit from economies of scale, thus lower-priced products.