Business Revision 2

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Sole traders
A sole trader describes any business that is owned and controlled by one person - although they may employ workers. Individuals who provide a specialist service like plumbers, hairdressers or photographers are often sole traders.
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Advantages
Easy to set up, Small capital investment means reduced start-up costs, and Freedom to make decisions
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Disadvantages
Responsibility, Long hours, and Unlimited liability
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Partnerships
Partnerships are businesses owned by two or more people.
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Types of partnerships
Doctors, dentists and solicitors are typical examples of professionals who may go into partnership together and can benefit from shared expertise. One advantage of partnership is that there is someone to consult on business decisions.
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Disadvantages of partnerships
The main disadvantage of a partnership comes from shared responsibility. Disputes can arise over decisions that have to be made, or about the effort one partner is putting into the firm compared with another. Like a sole trader, partners have unlimit
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Limited companies
A limited company has special status in the eyes of the law. These types of company are incorporated, which means they have their own legal identity and can sue or own assets in their own right. The ownership of a limited company is divided up into e
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Limited compaines
Because limited companies have their own legal identity, their owners are not personally liable for the firm's debts. The shareholders have limited liability, which is the major advantage of this type of business legal structure.
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There are two main types of limited company:
a private limited company (ltd) and a public limited company (plc)
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Limited compaines
Unlike a sole trader or a partnership, the owners of a limited company are not necessarily involved in running the business, unless they have been elected to the Board of Directors.
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Franchising
An entrepreneur can opt to set up a new independent business and try to win customers. An alternative is to buy into an existing business and acquire the right to use an existing business idea. This is called franchising.
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A franchise is a joint venture between:
franchisee and a franchisor.
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Opening a franchise
Opening a franchise is usually less risky than setting up as an independent retailer. The franchisee is adopting a proven business model and selling a well-known product in a new local branch.
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Other cards in this set

Card 2

Front

Easy to set up, Small capital investment means reduced start-up costs, and Freedom to make decisions

Back

Advantages

Card 3

Front

Responsibility, Long hours, and Unlimited liability

Back

Preview of the back of card 3

Card 4

Front

Partnerships are businesses owned by two or more people.

Back

Preview of the back of card 4

Card 5

Front

Doctors, dentists and solicitors are typical examples of professionals who may go into partnership together and can benefit from shared expertise. One advantage of partnership is that there is someone to consult on business decisions.

Back

Preview of the back of card 5
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