Ownership

Question 1

What is a sole trader

Answer 1

Someone who runs their own business and is self employed

Question 2

benefits and drawbacks of being a sole trader

Answer 2

\+ keep all of the profit
\+ control 
\+ quick start up 
- unlimited liability 
- difficult to raise capital 
- no one can cover illness or absence

Question 3

Partnerships

Answer 3

An unicorporated business owned by one or more people

Question 4

benefits of partnership

Answer 4

+ more capital

+ more skills

Question 5

What is an incorporated business

Answer 5

A business that is a separate legal identity to the owner.
owners limited liability
low set up costs

Question 6

What is an unincorporated business

Answer 6

The owner and the business are viewed as the same legally.
Owner has unlimited liability
Most operate as sole traders

Question 7

Describe the characteristics of a private limited company

Answer 7

• limited liability
• owners of a Ltd are known as shareholders
  -Shares ARE NOT listed on the public stock exchange
  + protects business from outside influences due to new shareholders needing to be invited
• takes longer to set up
• shareholders will expect dividends

Question 8

Describe Public limited companies PLC

Answer 8

• shares listed on the public stock market ‘Floatation’
• easy to raise finance through share capital
• shareholders have limited liability
• business can achieve high economies of scale

Question 9

Not for profit organisations

Answer 9

Aims to do something other than raising profit for the owners (providing a public service)
Charity- funded through donations, get some tax relief, eligible for certain grants
Social enterprise - aim is to help society, make money by selling products/services in the usual for profit business but they use the profits to benefit society (The Big Issue).