business ownership

Question 1

what is a sole trader ?

Answer 1

is a business that is owned and run by one person. There is only one owner, but they may have employees who work for them

Question 2

examples of sole traders :

Answer 2

hairdressers, gardeners, electricians , social media influencers ect

Question 3

examples of sole traders :

Answer 3

hairdressers, gardeners, electricians , social media influencers ect

Question 4

advantages of sole trading

Answer 4

-it is quick and easy to set up as a sole trader.
-the business owner(s) have a lot of control over the business and its money.
-it gives individuals the opportunity to be their own boss and make all the business decisions.
-it has low set-up costsz

Question 5

disadvantages of sole trading

Answer 5

-it has the risk of unlimited liability.
-it can involve long work hours and stressful conditions.
-there is a high level of responsibility for the owner.
-often the owner performs many different roles in the business.

Question 6

what is a partnership?

Answer 6

type of business that has between 2 and 20 owners they decide to set up and run a business between them.

Question 7

examples of partnerships :

Answer 7

lawyers, doctors eg. Kowalski & Davies Accountancy’ would probably be an accountancy business with two partners with the surnames Kowalski and Davies.

Question 8

advantages of partnership

Answer 8

-it is usually quick and easy to set up
-there is shared decision-making by the owners
-there is shared responsibility for debt by the owners
-partners bring more skills and ideas
there is more capital available to invest

Question 9

disadvantages of partnerships

Answer 9

-it can involve long work hours
profits have to be shared between the partners
-conflict amongst owners can occur
there is the risk of unlimited liability
-one partner may let the others down by not upholding their responsibilities in the business

Question 10

what is a private limited company?

Answer 10

can be a small or large business a private limited company has limited liability
and often these types of business have ‘Ltd’ after the business name.

Question 11

what is a public limited company?

Answer 11

it may choose to become a public limited company (PLC). In a PLC,
shares
are sold to the public on the
stock market
. People who own shares are called ‘shareholders’.

Question 12

advantages of public limited company

Answer 12

-the shareholders have limited liability
-increased negotiation opportunities with suppliers in terms of prices because larger businesses can achieve

Question 13

disadvantages of public limited company

Answer 13

-it is expensive to set up
risk of a hostile takeover
-shareholders may clash when making decisions about the business

Question 14

advantages of private limited companies

Answer 14

-the owners have limited liability
-any new shareholders need to be invited, which protects the business from outside influence
-be ur own boss

Question 15

disadvantages of private limited companies

Answer 15

-there is often more paperwork
-it can be very time consuming to set up