Business Ownership Flashcards
(25 cards)
What is a sole trader
A sole trader runs and owns their own business
What is a partnership
We’re 2 or more people own a business (up to 20 people), you need a deed of partnership.
What is a deed of partnership
This will detail each partners responsibilities
*By signing This it will form the partnership.
What does LTD stand for
Private limited company
What does PLC stand for
Public limited company
What is market share
The percentage of the total market that one particular brand or business owns
What is unlimited liability
They are personally responsible for all debts run up by the business
Assets
Something you own
You can sell
Limited finance
You are less likely to get a loan because of bad credit history
E.g. Went bankrupt
How much money worth of shares must you have to own a plc
£50,000
Can a plc sell shares to the public
Yes
Who can a ltd sell shares to
Fiends and family
What type of business can Competitors can see your financial info
Ltd
One benefit of a sole trader
Cheap and easy to set up All profits go to you Competitors can't see your account. Highly motivated You are the boss
Disadvantage of a sole trader
Unlimited liability Limited finance Difficult to find cover when Ill Few specialist skills They can loose there assets to pay if debts run up by the business
What are sleeping partners
Invest in, but do not run the business
Deed of partnership
Will detail each partners responsibilities
Benefits of a partnership
Risks and responsibilities are shared
More specialist skills simple and flexible
Competitors can’t see your account
Easier to raise finance
Drawbacks of a partnership
Unlimited liability
Arguments can occur between partners
If a partner dies or resigns the partnership is dissolved
Trust becomes a significant element between partners
Private limited companies have to send a”..1….”and a”..2..”
- Memorandum if association
2. Articles of association
What does a ltd send to companies house each year
A true a fair set of accounts
Benefits of a ltd
Limited liability
Increased sources of finance
More expertise available
Difficult for hostile takeovers to occur
Drawbacks of an ltd
Competitors can see financial information
Difficult to sell shares for individual shareholders
Other shareholders have to agree
Greater legal constraints
Can’t sell shares to the general public
Benefits of a plc
Large stable companies-more access to finance from banks
Enhanced reputation
Exposure through the stock exchange
