1.2 Types of Business Flashcards
0
Q
Public sector
A
Businesses owned/controlled by local government
1
Q
Private sector
A
Businesses owned by individuals
Sole trader, partnership, public limited company
2
Q
Advantages of a soletrader
A
- Cheap and easy to start
- Full control and ownership
- More personalised customer service
3
Q
Disadvatages of soletrader
A
- Unlimited liability
- Risk is all yours
- Limited source of finance
- Higher costs of production
4
Q
Soletrader
A
An individual who is the owner of his/her business
eg) Freelance, beauty salons
5
Q
Partnership
A
A business owned and controlled by two or more people
6
Q
Advantages of partnership
A
- Expanded financial capacity
- Share the risk
- More ideas
- Specialise in certain tasks
7
Q
Disadvantages of partnership
A
- Unlimited liability
- Lack of continuity
- Conflicts
- Lack of flexibility
8
Q
Companies
A
A business ownedby shareholders
9
Q
Advantages of companies
A
- Limited liability
- Simple transfer of ownership (sell shares)
- Continuity of existence
- Easy to raise capital
10
Q
Disadvantages of companies
A
- Heavier tax burden
- Cost of formation, time-consuming
- Government regulation
