1.5.4 Flashcards
What is a private limited company known as?
LTD
What is a sole trader?
A business that has a single owner.
5 Benefits of a sole trader?
Keep all profits
Control
No conflicts
little bureaucracy
Income tax
Why is income tax an advantage?
Only pay once pass the threshold.
3 disadvantages of a sole trader
Unlimited liability
Less capital
Nobody covers absenteeism
What is a partnership?
Businesses owned by 2-20 people, incorporated.
5 Advantages of partnership
More capital
More skills
being able to cover absenteeism
Less bureaucracy
Income tax
3 disadvantages of partnership
Unlimited liability
Split profits
Conflicts
what is a private limited company?
Owned by a group of shareholders protected by a limited liability with shares being sold to family and friends.
4 advantages of private limited company
More capital
Limited liability
Control who to sell too
Corporation tax
Why is corporation tax an advantage?
Will not change no matter how much profit generated.
4 disadvantages of private limited company?
Taxed from £1
Share profits
Cannot sell to many investors
Expensive and time consuming to set up
What are public limited companies known as?
PLC
What is main difference between plc and ltd?
How the shares are sold.
What is franchising?
When an individual (franchisee) buys the rights to operate a business model from a franchisor ( large company ), in exchange for a lump sum and on going fees.
What is a social enterprise?
Focuses to create social or environment impact.
Do social enterprises make profits?
Yes, but they re invest to help their cause.
What are lifestyle businesses?
Small, owner-operated businesses that prioritise personal interests or growth.
What are online businesses?
Businesses which can operate anywhere across the world through the internet.
What is a public limited company?
Incorporated business owned by shareholders, where stocks can be bought publicly.
What is stock market flotation?
When a business becomes a public limited company and sells to raise capital through selling shares publicly.
5 Advantages of PLC?
Access to more capital
Shared risks
Increased liquidity
Extended decision making
greater public profile
3 disadvantages of PLC
Vunerable to changes in share price
Directors are accountable for thousands
Affected by publicity.
What is Unlimited liability?
Business owners are personally responsible for all debts owned by business.
