A sole trader is a business run by one person only. This person gets to keep all the profits made by the business
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Advantagages to Sole Traders?
They are easy to set up. You get to be your own boss. You alone get the decide what happens with the profit
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Disadvantagages to a Sole Trader?
You have to work long hours. Unlimited liability-could lose personal posessions if business gets in debt
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What is a Partnership?
A partnership is a business made up of two or more people (up to 20)
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Advantages to a Partnership?
More owners means more ideas. More capital (money) can be put into the business
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Disadvantages to a Partnership?
Each partner is legally responsible for what other partners do. Unlimited liability (most do). More dissagreements as there are more owners.
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What is a Private Limited Company?
Private limited companies (PLC's) are firms whose shares can only be sold if all the shareholders agree.
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Advantages to a Private Limited Company?
Partners have limited liability meaning you cant lose more than you invest.
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Disadvantages to a Private Limited Company?
Theyre more expensive to set up than partnerships because of all the legal paperwork. Company are legally obliged to publish its accounts.
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What is a Franchise?
A Franchise is a righ to sell another firms products.
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Advantages to Franchising?
Less risk of the business failing as its already an established product. There is more chance of the person getting a bank loan. Could possible benefit from wider marketing. Franchisor may also provide training if needed.
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Disadvantages to Franchising?
Can only sell the products of the Franchises, cannot create your own. Have to run the business according the the franchisors rules (limited freedom).
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Other cards in this set
Card 2
Front
Advantagages to Sole Traders?
Back
They are easy to set up. You get to be your own boss. You alone get the decide what happens with the profit
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