Understanding Buisness Types Of Buisness Org Flashcards

1
Q

What is a sole trader

A

Any firm ran owned or controlled by one individual, often a hairdressers, barbers, newsagent

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2
Q

What is a partnership

A

Any firm owned or controlled by between 2 or 20 partners, eg popular with the professions such as Lawyers, Dentists, Opticians

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3
Q

What is a Ltd private limited company

A

A firm that sells shares in the business and only to friends and family.

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4
Q

Local government

A

A local organisation that is ran by and funded by the government, eg Local Leisure Centre, Waste & Recycling

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5
Q

What is a social enterprise

A

A social enterprise is a business that trades for a social and/or environmental purpose. It will bring in most or all of its income through selling goods or services. It reinvests most of their profits to further the ‘social mission’. Eg Social Bite

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6
Q

Who is a sole trader owned by controld and financed by

A

Sole trader sole trader owners savings

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7
Q

Who owns controls and finances a partnership

A

Partners partners in charge if specific area partners capital

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8
Q

Who owns controls and finances a Ltd

A

Shareholders direct manager in charge of specific area shares capital friends and family

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9
Q

Who owns controls and finances a plc

A

Shareholders bore of directors share capital and stock market

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10
Q

Who owns controls and finances a charity

A

Board of trustees manager of shop donations

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11
Q

Who owns controls and finances a publicly funded org

A

Government officers Government minister (central govt) or local councillors (local govt) tax revenue

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12
Q

Advantages and disadvantage of sole trader

A

Pros

Decisions are made easily as no permission is needed from a boss
• Owner makes all the decisions
• Owner takes all the profits
• Firm is easy to set up

Cons

• Stressful – got to make all the decisions
• Difficult to arrange time off ie holidays
• *UNLIMITED LIABILITY
• Limited sources of finance which limits expansion

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13
Q

Pros and cons of partnership

A

Pros

• More capital is available
• Workload is shared
• Greater pool of ideas/skills
• Partners can specialise in an area and so quality of work improves
Cons

• Possible clash of personalities
• Each partner has *UNLIMITED LIABILITY
• Profits have to be shared
• Deed of partnership has to be drawn up which can cost in legal fees

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14
Q

Pros and cons of Ltd private limited company

A

Pros

• Has a separate legal identity
• Raise more capital than a sole trader/partnership
• Shareholders have limited liability
• They send their annual accounts to Registrar of Companies but is NOT in the public domain

Cons

Consent of other shareholders needed before shares can be sold
• Expansion is limited to the funds of friends and family
• Have to pay auditors to look at the firm’s books

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15
Q

Pros and cons of plc public limited company

A

Pros

• Shares are quoted on the Stock Exchange
• Business is run by a Board of Directors
• Raise large sums of money

Cons

• Shareholders can freely sell their shares
• Firm may be subject to a take-over
• Shares can fall in value
• Annual Accounts must be published – involves a cost

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16
Q

Pros and cons of charity

A

Pros

• Funded through donations
• Ran by Board of trustees
• Social objectives
• Attract good employees

0 cons

17
Q

Pros and cons of government or public funded

A

Pros

• Funded through taxes
• Ran by Ministers
• Accountable to the public i.e. election
• Social objectives such as providing educational programmes that other channels won’t provide

There are no cons

18
Q

Definition of unlimited liability

A

this means that the owner or partners have full responsibility for all the debts in the business. In the event the business folds the owner will stand to lose all of their possessions.

19
Q

Definition of limited liability

A

This is where a shareholder is only responsible for the amount of money they have invested in the business.