ownership

Question 1

what are the differences between the the private and public sector?

Answer 1

-public sector businesses operate to serve the community and are often not for profit .They are ran by the government.
-private sector businesses operate for the purpose of driving revenue and profit for the company.

Question 2

What is a sole trader?

Answer 2

-a sole trader is where one person owns the business by themselves and has unlimited liability but keeps all the profits.

Question 3

what are the advantages and disadvantages of being a sole trader?

Answer 3

advantages- keep all the profits, choose your own hours, be your own boss, make all the decisions
disadvantages- unlimited liability, large work load, risky, responsibility

Question 4

what is a partnership?

Answer 4

-a partnership is a form of business ownership where 2-20 people own a business.

Question 5

what are the advantages and disadvantages of a partnership?

Answer 5

• advantages- easier to raise finance, shared decision making, shared expertise
  -disadvantages- unlimited liability, conflicts, profit sharing , loss of control

Question 6

what is unlimited liability?

Answer 6

• unlimited liability is being 100% responsible for any debts. You can lose personal possessions and you pay them back.

Question 7

what is limited liability?

Answer 7

• limited liability is when owners can lose the value of their original investment but are not responsible for the debts of the business. The business may become bankrupt but you cannot lose personal possessions.

Question 8

when is partnership the best option?

Answer 8

• partnership is the best option when you lack some of necessary skills and so need support or if you need to raise funds

Question 9

when is sole trader the best option?

Answer 9

sole trader is the best option when you have experience in a running business and when you want to be your own boss and make your own decisions.