Forms Of Business Flashcards
Who owns public sector companies and what is their goal?
The government own the public sector companies and they want to provide a service
Explain a sole trader
A person who is the exclusive owner of a business, entitled to keep all profits but liable for all losses as they have unlimited liability
Give the advantages to being a sole trader
Easy to set up
The sole trader is his or her own boss and makes all of the decisions
Owner keeps all the profits
Give the disadvantages to being a sole trader
All funding for the business has to come from the owner alone.
All risk is on the owner as a sole trader has unlimited liability and they are responsible for all debts
Business is small and may not be successful.,
Can lead to stress
Who owns private sector companies and what is their goal?
Individuals or groups of individuals own these companies and their goal is to make a profit
Explain the term franchise and give examples
A franchise is a business that already exists. The owners sell the licence to use the businesses model and brand to an individual and this person copies what is already in place. Ex. Mc Donald’s.
Explain franchiser
The person who owns franchise licence
Explain franchisee
The person who pays to use franchise licence
Give the advantages of setting up a franchise
Business is already a success and you receive help and training to run the business.
Franchise pays franchiser annual fee based on profits
Easier to get finance from bank because of business success
Keep most of the profits apart from annual fee.
Give the disadvantages to owning a franchise
Franchiser owns business
Can’t expand without buying a second licence
Expensive
What does AGM stand for
Annual general meeting
Who owns and controls private limited company and give example
It is owned by shareholders and the board of directors control, it. Ex. Dunes stores
Explain limited liability
This means if the business have debts they are not personally liable and they can only owe what they put into the company. This is because the Ltd company and the shareholders are separate entities.
Give the disadvantages of Ltd companies
Complicated to set up
Profits divided between shareholders( dividend)
Explain what a co operative is and how it is set up with an example.
Example of co operative is credit union.
Business run for the benefit of its members. Memebers come together to solve a problem and finance to set up co operative comes from members. Each member has one vote and they vote democratically. They have a limited liability.
