Types of businesses Flashcards
Who owns a sole trader?
The sole trader
Who owns a partnership?
The partners
Who owns a limited liability partnership (LLP)?
Members own but is a separate legal entity
Who owns a limited company?
Shareholders own but is a separate legal entity
Who owns a charity?
It is run by trustees for the public interest so no-one really owns it as such
Who manages a sole trader?
The sole trader
Who manages a partnership?
The partners are all entitled to an active role
Who manages a limited liability partnership (LLP)?
The members are all entitled to an active role
Who manages a limited company?
Run by directors on behalf of the shareholders (could be the same people)
Who manages a charity?
Run by trustees
Who is responsible for debts of a sole trader?
Owner is liable for entire debt of the business
Who is responsible for debts of a partnership?
Partners are each liable for entire debt of the business
Who is responsible for debts of a limited liability partnership (LLP)?
Members can lose up to their investment but no more
Who is responsible for debts of a limited company?
Shareholders can lose up to their investment but no more
Who is responsible for debts of a charity?
For unincorporated charities trustees may be liable for debts
How are profits of a sole trader taxed?
Income tax on profits paid by the owner
How are profits of a partnership taxed?
Each partner liable for income tax on their share of the profits
How are profits of a limited liability partnership taxed?
Each partner liable for income tax on their share of the profits
How are profits of a limited company taxed?
Corporation tax paid on the profits
How are profits of a charity taxed?
Exempt from tax when profit is used for charitable purposes
What is the ownership terminology used for a sole trader?
Capital
What is the ownership terminology used for a partnership?
Capital
What is the ownership terminology used for a limited liability partnership (LLP)?
Capital
What is the ownership terminology used for a limited company?
Equity
What is the ownership terminology used for a charity?
Net assets form the funds of the charity
What are the distributions called for a sole trader?
Drawings by owner
What are the distributions called for a partnership?
Drawings by partners
What are the distributions called for a limited liability partnership (LLP)?
Drawings by members
What are the distributions called for a limited company?
Dividends paid to shareholders
What are the distributions called for a charity?
Distributions for charitable activities
What are the accounting regulations for a sole trader?
None
Are financial statements for a sole trader available to the public?
No
What are the accounting regulations for a partnership?
Partnership Act, 1890
Partnership agreement
Are financial statements for a partnership available to the public?
No
What are the accounting regulations for a limited liability partnership (LLP)?
Limited Liability Partnership Act, 2000
LLP agreement
Are financial statements for a limited liability partnership available to the public?
Yes through Companies House
What are the accounting regulations for a limited company?
Companies Act, 2006
Financial Reporting Standards
Are financial statements for a limited company available to the public?
Yes through Companies House
What are the accounting regulations for a charity?
Charities Act, 2011
Charity regulators - the Charity Commission
Statement of Recommended Practice (SORP) or Financial Reporting Standard (FRS) 102
Are financial statements for a charity available to the public?
Yes through Companies House
