Business Ownership Flashcards
What is a sole trader
A business owned and run by 1 person
Own boss / self employed
What is a partnership
Business owned by 2-20 people
Deed of partnership
What is unlimited liability
The owner is completely responsible for the businesses debts.
Risking their personal assets
6 maker question
I- identify B- because L- leads to I- impact T- timing (long term and short term)
What is a ltd
A private limited company where shares are sold to family and friends
What is a plc
A public limited company where shares are sold on the stock market to anyone
Facts about ltd company
Limited liability
£2 is the minimal share capital to set up
Legally have to publish their accounts
Facts about plc company
Limited liability
£50,000 minimal share capital to set up
Legally both have to publish their accounts
Share price is available to anyone
What is limited liability
Owner (shareholder) only responsible for the amount they invested in
Not for profit
Businesses that have social and environmental objectives.
They do not exist to make profit
What is franchising
A business that sells rights to another business to use their name/ product or process
People involved in franchising
Franchisor
Franchisee
The 4 functional areas
Marketing
Finance
Human Resources
Operations(productions)
What is a business plan
It is a written document which sets out a business’s aims and objectives
Why do we use business plans
To see if the business is viable
To gain s.o.f
To have direction
Growth definition
When a business increases in size or status
Why do businesses want to grow
Gain customers- increase your market share
Brand recognition- increase your reputation
Economies of scale- lowers costs
How do businesses grow?
Organic growth
Inorganic growth
Organic growth
When a business grows by using their own resources
Inorganic growth
When a business grows by using another business in some way
