3.1.2 Flashcards

1
Q

unlimited liability

A

no legal difference between the owner and the company, if a business goes into debt the owner is liable

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2
Q

sole trader

A

no other partners

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3
Q

how many people are in a partnership

A

2-20

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4
Q

sleeping partners

A

provide money for the business but don’t have to do anything

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5
Q

private limited company

A

shareholders are invited to purchase shares by owner, usually friends and family

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6
Q

public limited company

A

listed on stock exchange, anyone can buy shares

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7
Q

disadvantages of a public limited company

A

-media coverage can be bad
-can’t control who buys shares
-can have a hostile takeover by a rival company

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8
Q

not-for-profit organisation

A

set up to help others rather than to make profit

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9
Q

advantages of a sole trader

A

-keep all the profits
-quick and easy to set up
-flexible working hours

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10
Q

disadvantages of a sole trader

A

-can be stressful
-unlimited liability
-likely to be a small business

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11
Q

advantages of a partnership

A

-each person can contribute money
-partners can specialise in a different aspect of the business
-shared work load

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12
Q

disadvantages of a partnership

A

-unlimited liability
-rewards divided between partners
-decisions slower

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13
Q

deed of partnership

A

-how to divide profits and losses
-how much money each partner gets paid
-working arrangements for each partnership

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14
Q

advantages of a private limited company

A

-limited liability
-has more status that a sole trader
-if business founders die company still exists

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15
Q

disadvantages of a private limited company

A

-legal procedures need to be completed
-share of sales is restricted
-summary of business’ financial accounts must be published

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16
Q

advantages of a public limited company

A

-access to greater number of potential investors
-attracts more media coverage
-more status