Consider the following two types of business organisation that Charly could choose for her new business. Which type of business organisation should Charly choose? Justify your answer. - Sole trader - Private limited company Sole trader: . . . . . . . Private limited company: . . . . . . . Recommendation: . . . . . . .

Justification might include:
- Charly should set up as sole trader because she will have complete control of which rugs to produce and will be able to keep all the profits from her hard work without having to share them with shareholders, as she may have to give dividends to shareholders if she formed a private limited company. She should not become a private limited company as this would mean that competitors may be able to see some of her accounts and she could not keep her financial data private, which she could if she was a sole trader. She will also have to pay to have her accounts audited each year which will increase costs.
- Charly should set up as a private limited company because she will have the protection of limited liability which means if CR goes bankrupt, she will not lose her personal possessions, as she would if she was a sole trader, only the \$10000 she plans to invest in the business at the start.