private sector Flashcards
(16 cards)
what is a sole trader?
a business owned by one person
what are 3 key features of a sole trader?
it is a business owned by one person
,the owners invest equity into the business from personal savings or a bank loan and although there is only one owners they can have employees
how many owners does a sole traders have ?
one
what are 4 advantages of a sole trade?
they get to keep all of the profit,owners makes all of the decisions,it is easy to set up and the business affairs are kept private
how many owners are there in a partnership?
2-20
what are the key feature of a partnership?
there can be 2-20 owners they are know. as partenrs,each owners wil invest money into the busienss and will be entitled to a share of the profit,a deed of partnership must drawn up
what are 4 advantages of a partnership?
there is more equity invested than compared to a sole trader,there are more ideas compared to a sole trader,there should be greater expertise and risks and responsibilities are shared between partners
what are 4 disadvantages of a partnership?
profits have to be shared between partners ,there could be disagreements between the partners ,the business suffers from unlimited liability,the actions of the partners are binding on each others
how many owners can there be in a private limited company?
1-50
what are 6 key features of a private limited company ?
it can identified by “limited” or “LTD” after the companies name,miniuum of 1 shareholder maximum of 50,equity can be raised by iss. shares howevethis is done privately as shares cannot be sold on the stock market although the issue of the shares must be carried out under the existing agreement,owners obtain shares which entitles them to a share of the profits,accounts have to be published in a summarised form and relevant documents must be filed with the registrar of companies
what are 3 advantages of private limited companies?
The business benefits form limited liability.This means that if the business goes bankrupt, then the owners will lose the moen they have invested into the business and not their own personal belongings.
More equity can be raised as there can be 1-50 owners
The company has it’s open legal identity
what are three disadvantages of a private limited company ?
All companies must be registered with the registrar of companies . this means that they have to share their financial information eg the financial accounts.which public and their competitors can see.
Shares cannot be sold to heart general public therefore the fufsd may be limited .
A sole trader who becomes ltd could lose some control of business.
how many owners can there be in a pLC?
2 or more
what are
marke
:
Shares can be sold on the stock market
Can have 2 shareholders upwards
Shareholders have a right to receive annual reports and speak at a annual general meeting
Voting is in relation to the number of shares held
Relevant documents must be filled with the registrar of companies,
what are 2 advantages of a PLC?
they benefit from limited liability and more capital can be raised compared to a private limited company as their shares can be sold on the stock market
