types of ownerships Flashcards
What is a Sole Trader?
business that is owned and controlled by only one person.
However, it does not stop it from employing other people to work in the business.
What are some advantages of being a Sole Trader?
profits 💵
control 🔮
quick decisions⏱️
set up ( cheap +easy)💰
financial information (private)🔒
What are some of the disadvantages of being a Sole Trader?
shortage of capital (may find it difficult to grow or get a loan) 💵
illness 🤢
hours of work ⏱️
continuity 🪦
shortage of skills 🎨
unlimited liability 🏠
Define a Partnership
A business which is owned and controlled by a minimum of 2 people
What are some advantages of Partnerships?
-different skills to offer 🎨
- shared workload 📑
-illness🤢
-more capital can be raised 💵
-easy and cheap to set up💸
-financial info is private💰
What are some disadvantages of Partnerships?
Profits have to be shared💵
May be disagreements 😾
Slow decision making ⏱️
Unlimited liability 🏠
What is a Sleeping Partner(Limited Partner)?
They invest in the business but do not take part in the day to day running of the business or any decision making
What is a company?
A business where the owners are shareholders
What are shareholders?
The owners of private and public limited companies
What are shares?
A unit of ownership in a limited company
Why might owners of limited companies sell shares?
To increase capital
What is a private limited company?
is owned by family and friends, to own shares you need to be invited by the owners
What are some advantages of an LTD
limited liability 🏠✅
sell shares - easier to raise finance 💵
continuity🪦
control🔮
What are some disadvantages of LTDs ?
DEF
agree how dividends are distributed
more expensive
finance published
What is a PLC?
a business that is managed by directors and owned by shareholders. A public limited company can offer shares to the public.
