Buisness Up Until Test 1 Flashcards
What is a sole trader?
Sole traders are businesses owned by one person.
☆What is a sole trader
☆A sole trader is a business owned by one person
☆What are the advantages of a sole trader
☆ All profit goes to the sole trader
☆financial info is private
☆easiest and cheapest option of business ownership
☆What are the disadvantages of a sole trader
☆ shortage of capital
☆unlimited liability
☆hours of work
☆ skill shortage
☆What is a partnership?
☆A business owned by atleast two people
☆What are the advantages of a partnership
☆more than one owner means its easier to raise capital
☆ A partnership is easy to set up
☆more skills in the business
☆What are the disadvantages of a partnership?
☆profit is shared could cause problems
☆ slower decision making could be disagreement between owners
☆ unlimited liability
☆What is a private limited company?
☆A private limited company is an incorporated company where ownership of shares are restricted. For the company to sell shares all of the owners must agree to sell them
☆What are the advantages of a private limited company (ltd)
☆limited liability
☆owners keep control over how businesses is managed
☆seen as less risky so more chance of getting a loan from a bank
☆What are the disadvantages of a private limited company?
☆ A lot of finance is needed to incorporate a business
☆company’s financial information is public
☆what is a public limited company ?
☆A public limited company is a company that sells shares on the stock exchange. Firms often become plc’s when they want to expand
☆What are the advantages of a PLC?
☆. Selling shares allows a company to raise finance for investment
☆. Much easier for a company to raise capital as they are seen as less risky by banks
☆. Limited liability
☆.what are the disadvantages of a public limited company ?
☆. Owners have limited say in how business is run
☆. Anyone can can take over the company with enough shares
☆.they company’s account must be made public
☆. What is limited liability ?
☆. Limited liability is when a company is not responding for the debts of their business if it fails they can only lose how much they’ve invested into it.
☆. What is unlimited liability ?
☆.Unlimited liability is when an owner is responsible for debts of a business if it fails . They can lose personal possessions.
