1.5 Entrepreneurs and leaders Flashcards
What is a sole trader
A sole trader is an individual who runs their own business and is self-employed. After you’ve paid your taxes, you can keep all of your company’s profits. You are personally liable for any losses your company incurs.
What is a partnership
A partnership is a business with two or more owners in a legal agreement. The partners sign a contract which sets out how the business is run, and they own all its assets and owe liabilities. Partnerships are often found in businesses that provide professional services, like lawyers or accountancy practices.
What is a private limited company
a type of company whose shares are not traded on a stock market and may only be sold if other shareholders agree
What is a franchise
A franchise is a business that grants another person or business the right to sell goods or services under its name. It accomplishes this by issuing a licence to the individual or other business.
What is a social enterprise
In essence, social enterprises are businesses that are changing the world for the better. Like traditional businesses they aim to make a profit but it’s what they do with their profits that sets them apart – reinvesting or donating them to create positive social change.
What is stock market flotation
When a companies shares are being offered to the public for the first time
What is a prospectus
A detailed document that advertises the company to potential investors and gives vital information about the company
What is a public limited company
A company owned by shareholders where the shares can be traded only on the stock market
What is a stock market
A market for second-hand shares available to the public
Advantages of Public limited company
Can raise lots of money
Decreased production costs due to economies of scale
Opportunity to dominate market due to scale
Easier to raise finance
Pressure to perform well
Disadvantages of Public limited company
High setting up costs
Outsider influence/control
Have to release data
Divorce of ownership and control
How does a private company become public
Stock market flotation - Also known as an Initial Public Offering (IPO)
