Cameron Balloons Ltd, Bristol, UK

Ownership

Cameron Balloons Ltd. is a private limited company. You can tell this because it says 'Ltd' after the name of the business. The 'Ltd' stands for 'limited'. It shows that the business has limited liability. Liability is the responsibility of a business owner for debts.

When Don Cameron made and sold his first balloon, he was a sole trader. You can tell how easy it is to set up as a sole trader because all Don had to do was to sell a product. There are no other formalities necessary.

In 1971 Don founded Cameron Balloons Ltd. Owners usually choose to be a private limited company because the advantages outweigh the drawbacks. The advantages are that he could keep control of the company by being the major shareholder. He could also raise money from friends and family as other shareholders. Owners may also want the protection of limited liability status, so Don would not be personally responsible for the debts of the business, should it fail. Being a company also meant that Don could sell the business if he wanted to. He also found that having limited company status made it easier for the business to borrow money.

The drawbacks were that he had to go through various legal formalities before the business could operate. These included registering the business with the Registrar of Companies at Companies House, and drawing up a Memorandum of Association and Articles of Association. The company also has to produce accounts each year which are available to the public, so the financial affairs of Cameron Balloons are no longer private. Don is also accountable to his shareholders for the operation and profitability of the company. There is also the risk that, if Don felt that he had to sell any of his shareholding, he could lose control of the business.