Sole Traders And Partnerships Flashcards
What is a reward for the risk that you’ve taken in starting your own business?
Personal success and satisfaction
A purpose of identifying competition in a business plan is?
To help you with your price strategies
What is not a benefit of being a sole trader?
Unlimited liability
How many owners does a business which operates as a partnership have?
Has at least two owners
What is most likely to describe the characteristics of a successful entrepreneur?
Determined and creative
True or false?
Sole traders can benefit from continuity in their business
False
Disadvantage of completing a business plan?
Time consuming
Definition of business activity?
What the business does to provide its customers with a product or service
Definition of enterprise?
Spotting an opportunity to provide a product or service that people are willing to buy
What is the definition of an entrepreneur?
An individual who has the skills and knowledge to set up and run their own businesses and is willing to take the risks.
Definition of capital?
Wealth in the form of money or assets.
Definition of a sole trader?
A business that is owned or controlled by one person
Definition of a business plan
The business plan sets out how the owners/managers of a business intend to achieve its objectives. Without a plan a business is likely to drift
What are the main characteristics of a business plan
1.The business idea
2. The people running the business
3. Market research
4. Finance
5. The objectives of a business
6. The target market
7. Competitors
What are the advantages of being a sole trader
A sole trader can be set up with little capital
A sole trader is in complete control of the business
All of the profits will go to the sole trader
All financial information is private
What are the disadvantages of being a sole trader
Shortage of capital
Illness
High hours of work
Continuity
Shortage of skills
Unlimited liability
What is the definition of unlimited liability
The owner of the business risks loosing his/hers personal possessions to pay off the debts of the business if it fails
What is the definition of partnerships
A partnership is a business which is owned and controlled by a maximum of two partners
What are advantages of partnerships
Partners may have different skills to offer
More capital can be raised to help the business operate or grow in size
Workload and ideas can be shared, and in the event of illness, the business should not experience a particular problem.
Financial information remains private to the partners
What are disadvantages to partnerships
Profit has to be shared between the partners
There may be disagreements
Decision making may be slower
Partnerships with unlimited liability, put the personal possession of the partners at risk
There may be a shortage of capital because raising finances is often restricted to the existing partners
What is the definition of limited partners/sleeping partners?
They invest money into the business, but do not take part in the day-to-day running of the business or any decision-making
True or false
A deed of a partnership will state how much capital partners should contribute to a business
True
True of false
A partnership has shareholders
False
True of false
A sole trader can employ as many people as they wish
True
True of false
Ordinary partners in a partnership and sole traders has unlimited liability
True
