Forms of Business Flashcards
What is a sole trader?
An individual trading in their own name or a suitable trading name
Self employed
What are Partnerships?
Multiple owners have shared responsibility over the business
What is a limited company?
Private limited (LTD) and Public limited company (PLC)
LTD = owned by shareholders who have to agree before anyone buys or sells shares, shareholders have lots of power, limited liability = more financial protection
PLC = anyone can buy or sell shares - sold publicly on the stock market, shareholders have minimal power
What is franchising?
A franchise is an agreement which allows an entrepreneur to use the business idea, name, model and reputation of an established business. In return the entrepreneur has to pay an initial plus ongoing fee/ royalty payments - usually a percentage of profit or revenue
The franchisor is the established business
The franchisee is the entrepreneur that buys into the franchise
What is a social enterprise?
A business that is setup with a core aim to use its profits to benefit society in some way
