business Flashcards
business ownership
refers to the control over the business and therefore establishing who gets the power to dictate instructions
4 forms of business ownership
- sole trader
- partnership
- private limited companies
- public limited companies
concept of liability
refers to the responsibility of business owners for the debts incurred by the business
2 types of liability
limited
unlimited
sole traders
business owned by one person
examples
florist, hairdresser, coffee shop
advantages of a sole trader
- easy to set up
- finance required
- control
- profits
- financial information
disadvantages of a sole trader
- unlimited liability
- illness
- shortage of capital ( money)
- hours of work
- skill shortage
- continuity
partnerships
a business owned by 2-20 people
examples
dentist, solicitors, accountants
advantages of a partnerships
- capital
- easy to set up
- more skills in the business
- workload is shared
- financial info is private
disadvantages of a partnerships
- profit is shared
- unlimited liability
- shortage of capital
- slower decision-making
- continuity
deeds for partnership
a document drawn up to outline key information on the partnership
how
Information on the way in which the business operates
The role of each partner within the business
How profits and losses will be shared among partners
Details on how much capital each partner has contributed – very important because not all partners invest an equal amount
