Business Ownership Flashcards
types of business ownership
sole traders, partnerships, private and public limited companies.
what is a sole trader?
A sole trader describes any business that is owned and controlled by one person - although they may employ workers. Individuals who provide a specialist service like plumbers, hairdressers or photographers are often sole traders.
what is a partnership?
Partnerships are businesses owned by two or more people. this means that they have to share the profits and don’t need to work long hours.
what are private and public limited companies
A limited company has special status in the eyes of the law. These types of company are incorporated, which means they have their own legal identity and can own assets in their own right. The ownership of a limited company is divided up into equal parts called shares. Whoever owns one or more of these is called a shareholder.
what are the advantages of being a sole trader
Easy to set up, Small capital investment means reduced start-up costs, Freedom to make decisions
what are the disadvantages to being a sole trader
Disadvantages: Responsibility, Long hours, Unlimited liability
