GCSE Business

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What is a sole trader and partnership?

 Parntership: A group between 2 – 20 people who run a business together. Advantages: More capital is available to invest. Owner has complete control. Partners can cover each other’s absence. Disadvantages: Unlimited liability, number of partners is limited, one partner could be unreliable.

Sole Trader: A business owned and operated by one person, although they can employ staff. Advantages: Can keep all profit. Work the hours he choose, few legal regulations. Disadvantages: Unlimited liability, business will stop working if bob is sick, cant grow.

Similarites?: They have unlimited liabilty, their business cannot grow, because there is only 2 workers, both have to pay tax (hmrc), both get to choose when they went to go on holiday.

Differences?: If you die in a partnership, the business will carry on. In a partnership there is a hgiher capital. In a sole trader you can have all the proft. In a sole trader there are no arguements.

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LTD. (private limted company).

What is a LTD?: A company in which a number of shareholders. Not more than 50 contribute funds to the company in returns for shares. Shares cant be sold on the Stock exchange, theyre sold to family/friends.

Advantages; Limted Liabilty, Eaiser to raise capital, Management is shared.

Disadvantages: Expensiveand difficult to set up, Cant advertise, Shares cant be sole to public.

Similarties and differences between partnerships and LTDS.

Similarites: Responsiblty is shared in each type of company, They are both expensive to set up, Management is shared.

Differences: LTD has limted liabilty annd a partnership has unlimited liabilty, In a LTD it eaiser to raise capital. In an partnersdhip you can have 20 partners however an LTD you can have shareholders.

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Public Limitied Liabilty.

What is a public limted company?

A company in which an unlimited number of sharehoders contribute funds to the company in return for shares. Shares can be sold on the stock exchange.

Advantages: Limted Liabilty, It's an INCORPORATED BUSINESS, high degrees of specialisation.

Disadvantages: Minimun 50,000 capitial to start, may have communication and managemen problmes due to size, annual accounts have to be published full.

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A franchisee, who buys the right from a franchisor to copy a business format and a franchisor, who sells the right to use a business idea in a particular location.


  • Everything is already set up for you
  • You don't have to struggle creating a new name/image
  • The reputation is already there
  • Get free training and equipment
  • Staff are easy to get


  • You get no say in anything that goes on
  • You can't make any changes to the brand name or image
  • The business has to stay how it is
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What are cooperatives?:

Co operatives are businesses that are owned by members.

Members are usually employees within the business.

Each member has a share in the business.

Maint types of cooperative?:

Retail - which buy goods in bulk at a discount and sell them cheaply to members.

Producer - which produce goods and then get together to sell them to gain a better price.

Worker - which are businesses that are owned by their members.

Advantages: has a special type of limited liabilty. Members have control over the business. Unlikely to be conflict as have common goals.

Disadvantages: Finance must be provided by members. Banks are relucant to lend to co ops. All members have equal say in the business.

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