Business test - 1.4.1

• Limited Liability

  • When an Entrepeneur's risk is limited to the amount they have actually invested in their company, no personal assets can be seized.
  • An Advantage is that their personal assets cannot be seized.
  • A disadvantage is there are fees and taxes associated with the business structure.
• Unlimited Liability

  • When an Entrepeneur's risks includes their own personal assets e.g. car.
  • An advantage is that there are less taxes and fees attached to the business.
  • A disadvantage is that personal assets can be seized.
• Sole Trader

  • A sole trader is a business own and ran by one person.
  • An advantage of being a sole trader is that they have overall control over the business and as a result keep all profits made.
  • A disadvantage of being a sole trader is that they cannot bounce ideas off anyone and as a result they do not meet customer needs.
  • Unlimited Liability.
• Partnership

  • An agreement between two + people who share the management and profits of the business.
  • An advantage is that the business will always be improving due to more than one opinion being shared.
  • A disadvantage is that the profits will have to be shared.
  • Unlimited Liability
• LTD

  . LTD is a private limited company that is registered on GOV website that is owned by share holders that must be close friends/family members who have limited liability.
• Franchise

  • When one business gives permission to an Entrepeneur to set up a business using its brands name and selling its products.
• Franchisee

  • Someone who is given the right to set up a business in the brands name.
  • An advantage is loyal customers and promised sales as consumers are familiar with the brand.
  • A disadvantage is no full control over the business and paying a royalty payment.