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Flashcards in Forms Of Ownership Deck (13)
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1

Name 2 features of a sole trader.

•One person owns and runs the business
•Has unlimited liability

2

Name 4 features of a partnership.

•2-20 people own and run the business
•Split the profits
•Has unlimited liability but there are exceptions
•Produces a Deed of Partnership

3

Name 4 features of a Private Limited Company (Ltd).

•2 or more shareholders
•Cannot sell shares on the Stock Market
•Limited liability
•Business has a separate legal identity

4

Name 4 features of a Public Limited Company (PLC).

•2 or more shareholders
•Sell shares on the Stock Market
•Limited liability
•Business has a separate legal identity

5

Name the 7 usual business objectives.

•Profit
•Social Benefit
•Increasing sales
•Increasing market share
•To provide effective service to the public
•Survival
•Growth

6

What are the advantages of a sole trader?

•Easy to set up
•You get to be your own boss
•You decide what happens to any profit

7

What are the disadvantages of a sole trader?

•You have to work long hours and don't get many holidays
•You have unlimited liability
•Sole traders are unincorporated

8

What are the advantages of a partnership?

•More owners means more ideas
•More owners means more capital can be put into the business

9

What are the disadvantages of a partnership?

•Each partner is legally responsible for what all other partners do
•They have unlimited liability but sole can have limited liability
•More owners means more disagreements

10

What are the advantages of a Private Limited Company?

•They have limited liability
•They are incorporated, the company can continue trading after a shareholder dies

11

What are the disadvantages of a Private Limited Company?

•More expensive to set up because of all the legal paperwork you have to do
•Company is legally obliged to publish its accounts every year

12

What are the advantages of a Public Limited Company?

•Much more capital can be raised by a PLC than by any other kind of business
•That helps the company to expand and diversify

13

What are the disadvantages of a Public Limited Company?

•Each shareholder has very little say in how the company is ran
•It's easy for someone to but enough shares to take over the company
•Large number of shareholders so might be hard for a general agreement on company objectives