learning aim A Flashcards
What is ownership?
Refers to the legal structure of a business I.e sole trader, PLC, LTD
What is a sole trader ?
A sole proprietor
What do sole traders typically provide ?
A specialist service i.e plumbing
Advantages of being a sole trader
-keep all profits
-be your own boss
-low start up costs
-easy to set up
Disadvantages of being a sole trader
-unlimited liability
have to fulfil multiple roles
fully responsible for business
hard to take holidays
What is a partnership ?
owned by 2 or more people who combine resources to start a business
Advantages of being in a partnership
shared workload
easier to take holidays
shared expertise
low start up cost
Disadvantages of being in a partnership
Collective responsibility
unlimited liability
shared profits
conflict between business partners
What is an LTD
A private limited company, owned by shareholders
Are LTD shares open to the public ?
No, only close friends and family
Advantages of being an LTD
limited, separate legal identity
tax efficient
easy to transfer business to someone else
low start up
limited liability
Drawbacks of being an LTD
Must publish accounts yearly
High legal and administrative set up costs
Harder to motivate and control workers
An example of an LTD
local retailers i.e Dyson
What is a PLC
a company owned by shareholders, run by directors and shares can be sold to stock exchange
Cons of being a PLC
more legal requirements
risk of uncontrolled growth
risk of losing control of business
management issues
