4 business activity : ownership Flashcards Preview

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Flashcards in 4 business activity : ownership Deck (18):
1

Sole trader

One person who owns the business however they can still employ people
Mostly small business

2

Partnership

Common in certain sections
Partners have equal say and equal share of profits
2 or more

3

Private limited company ( Ltd)

Shares can only be sold or all shareholders agree
Shareholders are usually family , Friends and employees

4

Public limited company (Pic)

Shares in the company are shared on the stock exchange bought by anyone
Min £50,000 shares
Expand

5

Advantages: sole trader

Sustainability- variety
Set up - easy and cheaper
Control
Ownership
Finance - kept private

6

Advantages: partnership

Ownership - some partners are sleeping partners
Illness - work can be shared
Specialist skills

7

Advantages: private limited company (Ltd)

Limited liability
Legal identity - business is separate from its owners
Incorporated- keep trading

8

Advantages: public limited company (Pic)

Limited liability
Raise sums do finance by offering shares
Expand and diversify
Relative ease

9

Disadvantages : sole trader

Long working hours
Unlimited liability
Hard for large scale production and funds
Shortage of skills

10

Disadvantages : partnership

Profit shared
Unlimited liability
Disagreement
Shortage of capital

11

Disadvantages : private limited company (Ltd)

Financial information is available to the public
Lack of capital
More expensive - set up and papers
More complex

12

Disadvantages : public limited company (Pic)

Cost of setting up
Complicated set up
Financial information is public
Communication issues
Easy for someone to buy shares ( 51 % or more = takeover )

13

Limited liability

No matter how big their debts are they are only at risk of losing the amount they invested

14

Unlimited liability

Business isn't doing well so the owner risks losing personal possessions to pay of debts . When they can't be paid the business is responsible

15

Type of ownership - startup
Money

Partnership
Ltd

16

Type of ownership - start up
More skills needed

Partnership

17

Type of ownership - start up
Wealthy owners

Private limited company

18

Type of ownership - established
Ltd to ......

Pic to fund expansion