A description of the type of business - Sole trader:

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                                Unit 2

My group 1 company will be Waitrose. My reason for selecting a prestigious company such as this is because I work for them so then my inside knowledge will be a useful addition to my portfolio.

My group 2 company will be the Tussauds Group. They seem to be a big company and are also well known. So the information would not be hard to find.

Pass points

Task 1/ P1:

A description of the type of business:

Sole trader:

This is the most commonly found type of business in the United Kingdom. A sole trader is a business with only one owner, and the responsibility of the business rests on that person. The business can trade under the owner’s name (i.e. Joes Chippy) or under a business name (i.e. Feltham chip shop). Many sole traders provide a service of some sort. Sometimes the most amounts of employees would be 3. The owner provides the capital. The owner takes all the risks of the business, receives all the profit and carries all the losses. This has unlimited liability because it is only a small business therefore all his personal belongings are used to pay debts and then in some cases you might find that you will be classed as bankrupt.

Advantages:

        A sole trader is easy to set-up

        You can make the decisions yourself – there is no one to consult.

        You are your own boss

        You can choose your own hours so you can make it much more flexible

        The most common transaction is cash.

Disadvantages:

        You have long working hours and because 9 out of 10 sole traders don’t employ more than themselves you would be there open until close.

        It is difficult to raise the capital required to set it up.

Partnership:

A partnership has a minimum of 2 owners and a maximum of twenty. A partnership is easily formed. Professional people as a way of organising partners to run a specialist part of the business use the partnership as a form of organisation. The partners draw up a deed of partnership to outline the running of the business and who has the responsibility of set areas. The relationship between the partners is set out in a deed of partnership. There does not have to be such a deed but if there is not, the law presumes that the partners own the business and share the profits equally. A partnership is often the first step taken by sole traders who want to expand their business. This has unlimited liability, all the partners personal belongings are used to pay off debts owed even their house or car as with a sole traders.

Advantages:

        New skills and ideas are introduced

        The capital required is far more much easier to rise as the partners would pull together.

        The partners can contribute to the business to the business with their individual skills or excels in certain areas.

Disadvantages:

        The partners might not be able to agree on certain methods or ideas

        Profit has to be shared so everyone is equal

        You would have to consult the other partners before making a decision.

Deed of partnership Contents:

1.        INTERPRETATION 

1.        OPERATIVE CLAUSE 

2.        FORMATION OF THE PARTNERSHIP 

1. COMMENCEMENTS AND TERMINATION 

2.        PARTNERSHIP NAME 

3. NATURES AND PLACE OF BUSINESS 

4.        NAME OF BUSINESS 

5.        BANK ACCOUNT AND FINANCE 

3.        CAPITAL PROFITS AND LOSSES 

1.        INITIAL CAPITAL 

2.        FURTHER CAPITAL 

3.        PROPERTY 

4.        SHARE OF PROFITS AND LOSSES 

5.        EXCLUSION OF THE "ACT" 

4.        MANAGEMENT 

1.        HOTEL LICENCE 

2.        LICENSEE 

3.        OWNERSHIP OF HOTEL PROPERTY 

4.        SOLE MANAGEMENT 

5.        MANAGEMENT 

6.        NON-INTERFERENCE BY NON-MANAGEMENT PARTNERS 

7.        ACCESS TO PREMISES. 

8.        EXCLUSION OF PARTNERSHIP "ACT" 

5.        OBLIGATIONS OF PARTNERS 

1.        DUTIES TO PERFORM

2.        ACTS NOT TO BE DONE WITHOUT CONSENT. 

3.        INDEMNITY BY PARTNERS. 

6. ACCOUNTS AND AUDIT 

7.        EXPULSION, RETIREMENT & DEATH OF A PARTNER. 

1.        EXPULSION FROM PARTNERSHIP ON DEFAULT. 

2.        RETIREMENT. 

3.        DEATH OF PARTNER. 

4.        EXCLUSION OF THE "ACT" 

8.        NOMINATION OF PARTNERS. 

1.        POWER OF PARTNER TO NOMINATE A PARTNER. 

2.        MODE OF NOMINATION. 

3.        DATE OF NOMINATION TAKING EFFECT. 

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4.        NOMINEE TO BE BOUND BY AGREEMENT. 

5.        EXCLUSION OF THE "ACT" 

9.        PROCEDURE ON DISSOLUTION. 

Franchise:

        A franchise is the right to trade using a successful company’s products and image. The franchiser offers the franchise. The franchisee buys or leases the franchise. The franchiser expands their business without the burden of debt. The franchisee pays a royalty fee to and other payments are made to the franchiser. Franchisers maintain control over most of the business. Franchisees are generally better motivated because of the profits they will receive. A franchise has a limited liability because the franchisee is separately run from the ...

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