Buisness ownership

Question 1

4 main types of buiness owenership

Answer 1

• sole trader
• partnership
• private limited company
• public limited cmpany

Question 2

What is a sole trader?

Answer 2

buiness owned and run by one person.

Question 3

advanteages of being a sole trader

Answer 3

• low start up costs
  -owener gets all proft
• owner makes all decisions
• owner can keep finances private

Question 4

disadvantages of being a sole trader

Answer 4

• unlimited liability- owener is responsible for debts of the buisness
• might have to use own savings
• lot of responability

Question 5

what is a partnership?

Answer 5

a buisness owned and run by 2-20 people.

Question 6

advantages of a parnership

Answer 6

• low start up costs
• each partner can have a different speciality
• ## workload and debts are shared

Question 7

disadvantages of partnership

Answer 7

• unlimited liability- partners are pesonally responsible for the debts in buisness.
• diagreements between partners
• profit is shared between partners
• cannot raise as much capita/l finance

Question 8

advnatages of private limited company?

Answer 8

• limited liability -(owners are not personally responsible for paying debts)
• finance can be raised by selling shares
• continuity- buisness continues to exist evin if one of the shareholders leaves

Question 9

what is a private limited company? (ltd)

Answer 9

buisness owned by shareholders. shares are sold privately to friends and family.

Question 10

disadvantages of private limited company

Answer 10

profits have to be given to shareholders in the form f divends

• buiness has to publish its accounts every year
• higher set up costs
• finance is limited as cannot sell as many shares

Question 11

What is a public limited company?

Answer 11

owned by shareholders.Shares are sold to the public on the stock exchange.

Question 12

Advantages of public limited company

Answer 12

-limited liability (owners are not personally responisble for paying debts)

• finance can be raised selling shares
• contunitity
• run by directors who have experience.

Question 13

disadvantages of public limited company

Answer 13

• profits have to be given to shareholders in the form of divends
• has to publish accounts every year
• higher set up costs
• threat of takeover if 51% or more are bought by someone else