Business Ownership

Question 1

types of business ownership

Answer 1

sole traders, partnerships, private and public limited companies.

Question 2

what is a sole trader?

Answer 2

A sole trader describes any business that is owned and controlled by one person - although they may employ workers. Individuals who provide a specialist service like plumbers, hairdressers or photographers are often sole traders.

Question 3

what is a partnership?

Answer 3

Partnerships are businesses owned by two or more people. this means that they have to share the profits and don’t need to work long hours.

Question 4

what are private and public limited companies

Answer 4

A limited company has special status in the eyes of the law. These types of company are incorporated, which means they have their own legal identity and can own assets in their own right. The ownership of a limited company is divided up into equal parts called shares. Whoever owns one or more of these is called a shareholder.

Question 5

what are the advantages of being a sole trader

Answer 5

Easy to set up, Small capital investment means reduced start-up costs, Freedom to make decisions

Question 6

what are the disadvantages to being a sole trader

Answer 6

Disadvantages: Responsibility, Long hours, Unlimited liability