Business owndership Flashcards
What is a soletrader?
A business that is owned and run by one person but they may have employees work for them eg influencers, hairdressers and electricians
Advantages of sole trading
quick and easy to set up
make all descisions yourself
low set up costs
keep all profits
Disadvantages of sole trading
risk of unlimited liability
can involve long working hours
may find raising money for a start up difficult
needs to handle aspects of business and may not have skills required eg finances marketing and running it
What is a partnership?
a type of business that has between 2 and 20 owners that provides a professional service eg lawyers and doctors
Rules in a partnership
Rules are agreed in a document called a deed of partnership
how to divide up profits
how descisions are to be made
how to decide wether someone else can join the partnership
Advantages of partnership
shared descisions making
shared responsibility for debt
bring their own skills and ideas
partners can cover for eachother
Disadvantages of a partnership
profits have to be shared
conflict amongst owners can occur
risk of unlimited liability
liable for actions of other partners
What is a not for profit organisation?
a business that aims to do something other than make a profit sick as providing a service or helping people eg a charity
What is charity?
a business whos aim is to raise money for good causes or help people animals or tge environment , funded mainly by donations
What is an unincooperated business?
owner IS the business so the owner had unlimited liability, most operate as sole traders
What is an incooperated business?
business is separate from its owners or managers and has limited liability
What is limited liability?
share holders are not legible for the debts and obligations owed by the company
What is unlimited liability?
exposes owners to significant personal financial risks as creditors can seize any personal assets and property in order to pay debt of a business
What is a private limited company? LTD
a company that does not offer any stock to the public and there is no need for them to disclose any financial info to the public
What is a public limited company? PLC
a company which does offer stock to the public generating money and is not responsible for the company’s debt
