Business Ownership

Question 1

The 6 main types of business ownership

Answer 1

• Soletrader
• Partnership
• Private
• Public limited companies
• Franchises
• Co operatives

Question 2

Soletrader

Answer 2

\+Your own boss
\+Decide on hours, what to sell 
\+Keep profit 
-Unlimited Liability-All your responsibility 
-Need a variety of business skills
-Start up costs and competition

Question 3

Partnership

Deed of partnership- Legal binding agreement between partners in a partnership

Answer 3

Two or more people start up a business without forming a company. Like a Soletrader they have Unlimited Liability.

Question 4

Private Limited Companies

Often family owned

Requirements:
>Memorandum of association - List the owners as known shareholders
>Articles of association- Rules for running the business
> Register the company with companies house

Answer 4

Owners have Limited Liability, they are not responsible for the losses in the business. Owners regarded as separate entities to the business.

Question 5

Public Limited Companies

Tesco, M&S, British telecom

Can own 51% to over- rule anyone

Answer 5

Have Limited Liability, The owners are the public. Owned by shareholders in return for a share of the profits.

This could be the general public or specialist investors.

Question 6

Franchise

Franchisor - Mcdonald’s etc selling the business

Franchisee - someone buying the license to run the business

Answer 6

Entrepreneurs Buy the license for a business (Franchisor) to run the business in exactly the same way. Business is already created and trusted, must conform to rules and regulations, includes: products, prices, opening times. Can be expensive license for a thriving business.

Royalty payment - The fee taken out of the sales value for the Franchisors assets and brand.

Question 7

Co-Operatives (Social Enterprises) - Working together

A co operative operates under an employee - owned co-operative, all employees are involved in the management this way means profits split evenly. Generally by a board of directors voted in by members.

Limited liability, stable, Democracy

Answer 7

Organisations set up to benefit society. These businesses will aim to make profit but it is not their main objective.

Co-operatives - A collection of similar businesses that work in unison

Co-op food - Aim to provide ethical food