Business ownership- topic 1.2

• different types of business ownership are sole trader, partnership, company, not-for-profit
• a sole trader is an individual who owns their own business
• advantages of being a sole trader include having complete control over the business, keeping all profits made
• disadvantages of being a sole trader is that if the business goes wrong you have unlimited liability
• Unlimited liability means that the owner is personally responsible for the debts of the business, there is no limit to the amount the owner has to pay.
• Partnership occurs when 2 or more people join together to carry on a business.
• Deed of a partnership is an agreement between partners that set out the rules of the partnership
• advantages of a partnership is that more people involved in the decision making process and the risks they take
• disadvantage of a partnership is that you have to share the profit
• A stakeholder are individuals or groups that are affected by and the affect the performance of an organisation.
• A company is owned by its investors who are called shareholders
• A shareholder is a person who owns shares in a company.
• Limited liability is when the owners responsibility for the business debt is only the amount that they have invested.
• A private limited company is a business owned by its shareholders and run by its directors.
• 2 different types of company are public limited companies (plc) and private limited company(ltd)
• A public limited company is a company that has shares that can be sold to the public.
• Stock exchange is a market for buying and selling shares of public limited companies. (larger numbers of shares are being brought and sold at he same time)
• Flotation occurs when a ltd becomes a plc and has it shares listed on the stock exchange.
• A share issue occurs when a company sells additional shares in a business.
• A private limited company is owned by shareholders
• advantages of setting up a private limited company is liability is limited and managers can be employed to run the business day-to-day while the owners remain in control.
• disadvantages of setting up a private limited company is that it is more expensive to set up and there is a risk of losing control
• Public limited companies is one that has shares that are sold to the general public.
• an advantage of a public limited company is that they attract more media as they usually have more shareholders.
• a disadvantage is that a plc cant control who buys its shares
• sales per employee= sales/ number of employees
• A not-for-profit organization is set up to achieve objectives other than profit for example a charity.
• An asset is something that is owned by a business and has value.
• Social objectives are the goals of a business intended to help society in general or specific groups of people.