Business Studies | Unit 1

• A business is an organisation that aims to make money by providing goods or services.
• The main types of businesses are sole traders, partnerships, limited companies, public limited companies (plcs), private limited companies (lts) and not-for-profit organisations.
• Sole traders have one owner who has unlimited liability for the debts of their business.
• Partnership - Two or more people running a business together
• Partnerships consist of two or more people working together as co-owners with shared responsibility for running the business.
• Sole trader - one person who owns the whole business
• Private limited company (LTD) - A type of limited company where ownership is restricted to a small number of individuals
• Public limited company (PLC) - A type of limited company whose shares can be bought and sold on the stock exchange
• Limited companies can be either publicly owned plc's or privately owned ltd's.
• Limited company - A separate legal entity owned by shareholders with limited liability
• Limited company - separate legal entity owned by shareholders with directors responsible for running it
• Franchise - A business model where an individual buys the right to use another's brand name and sell their products/services under license
• Public Limited Company (PLC) - A large, publicly owned company that can be bought by anyone on the stock market
• A sole trader has unlimited liability, meaning they are personally liable for all debts owed by their business.
• Private Limited Company (LTD) - Owners' personal assets cannot be used to pay off the firm’s debts if it goes bankrupt.
• Public Limited Company (PLC) - can sell shares to anyone
• Cooperative - An organization owned by its members, usually employees, customers, or local residents
• Limited liability partnership (LLP) - A hybrid legal structure that combines elements of both a traditional partnership and a private limited company
• Shareholders own shares in the company but do not necessarily work for it.
• Private Limited Company (Ltd) - shares cannot be sold to the general public
• Public Limited Company (PLC) - shares can be bought and sold on the stock market
• Sole Trader - One person owns and runs the entire business themselves
• Partnership - Two or more people who run a business together with equal rights and responsibilities
• Unincorporated Association - Not-for-profit organisation set up by members to achieve common goals
• Advantages of being a Sole Trader include having complete control over decisions made within the business, keeping all profits earned from sales, and not needing to split any earnings with other owners.
• Directors manage the day-to-day running of the company on behalf of shareholders.
• Benefits of being a public limited company include accessing capital through selling shares, having greater credibility due to regulation, and potentially attracting better staff as salaries may be higher than other types of businesses.
• Drawbacks of being a sole trader include unlimited personal liability, meaning if the business fails, creditors may pursue the owner's personal assets to recover debts owed.
• A disadvantage of being a sole trader is that they are personally liable for debts owed by the business, which means that creditors could take action against their personal assets such as their home or car.
• Managers oversee specific areas of the business such as finance, marketing, production, and human resources.
• Benefits of being a sole trader include having complete control over your business decisions and keeping all profits made from the business.
• The board of directors is responsible for making major decisions about the direction of the company.
• Advantages of being a sole trader include having complete control over your business, keeping all profits made by the business, and being able to make decisions quickly without consulting anyone else.
• Shareholders own part of the company and have voting power at Annual General Meetings (AGMs).
• A disadvantage of being a PLC is that they are subject to stricter regulation than private limited companies.
• The advantages of forming a partnership include sharing risks and costs, bringing different skills and experiences to the table, and potentially increasing profitability through increased productivity.
• The main advantage of being a PLC is that it allows businesses to raise large amounts of capital through selling shares.
• Disadvantages of being a partnership include disagreements between partners leading to dissolution of the business, lack of continuity when one partner leaves, and potential loss of privacy regarding financial information.
• Disadvantages of being a sole trader include unlimited liability (meaning that if the business fails, personal assets can also be seized), difficulty raising finance without relying solely on savings, and potential isolation as there is no one else to bounce ideas off of.
• The advantages of being a private limited company include limited liability, easier to raise finance through issuing shares, and increased credibility compared to sole traders and partnerships.