• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Ownership.The majority of businesses are owned by sole proprietors. The owner has complete control of the business, and is completely responsible for the company success or failure.

Extracts from this document...


The majority of businesses are owned by sole proprietors. The owner has complete control of the business, and is completely responsible for the company success or failure. The risks of sole proprietors are highly immense, but the rewards are great in job satisfaction. The main advantages of this form of business are: * Small start up costs. It is simple and very inexpensive to get set up as a sole proprietor. However you will have to tell the income tax authorities and you will be taxed under schedule D. you must also keep proper business accounts. * All profits are kept by the owner of the company, although they must save enough money to be able to pay tax, interest charges on loans and VAT. * Losses made in the first year may be offset, or balanced, against tax paid earlier in the same financial year. * The small business is very flexible, where if one kind of activity is not making any profit the owner can easily and quickly switch to something else. ...read more.


* Extra capital for the business. * Two people can normally raise more money than one. The main disadvantages are: * Working together can cause disagreement. * Each partner can provide different amount of capital. * Profits may be shared unevenly. * Not sure on who should control the business. The next thing to do in a business is to form a private limited company, (this gives the company the right to add abbreviation Ltd to its name). The share holders own the company and are usually family members of the persons who set up the business. Some of the shares my also be owned by friends, employees and business associates. The main advantages are: * The founders of the business are usually the main shareholders and directors of the firm. * The people who started the business own it and have a say in everything that happens. * If the company was in debt the main shareholders would not have to pay out of their own money. * If they invested �1000 in shares they may lose that but not a penny more. ...read more.


Control of plc's: The majority of shares in practically all companies are owned by institutional investors. Their huge blocks of shares give them great influence over companies, policies and the way in which they are run. The institutions votes at company annual general meetings (AGMs). Franchising is a form of co-operation, often between a big firm and a sole proprietor. The firm has a product known by people with its own name, such as macdonalds and in return for an initial fee and continuing royalty payments, the franchiser allows the franchisee to set up his or her own business and to use the firm's own name. Advantages: Franchisee's have many advantages and have a much greater chance of success than smaller businesses as the product has to be tested and has a secure place in the market. Disadvantages: * Has less independence than other sole proprietors. * Will not be able to sell the business without the franchisers agreement. * Does not always have the right to renew the franchise automatically. * Has to make continually royalty payments to the franchiser. * Sometimes has to pay a mark-up, or percentage of the price, on supplies from the franchiser. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Structures, Objectives & External Influences section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Structures, Objectives & External Influences essays

  1. Marked by a teacher

    ASDA's Ownership

    4 star(s)

    The husband deals with the paperwork and the wife deals with customers and deciding what special offers their store should offer. (E.g. buy a coke get one free). Also, they wanted to earn a little bit more money and improve their security and running a small shop was the perfect decision/choice.

  2. Btec National Business Level 3 Year 1 - Exploring Business Activity

    Purposes: If we look at an organisational chart it should give us a clear picture of what the relevant sections of the business are and who reports to whom. When Microsoft refers to line management and is talking about a person who is directly responsible for somebody else.

  1. The Business Environment Coursework. Describe the type of business, purpose and ownership of ...

    Developing individuals at every level means that they have home-grown managers who understand our culture and can effectively develop our business. 6. Build brands - brands enable the building of important lasting relationships with customers.4 Culture Caf� Culture caf�'s main aim is to make profit and increase sales.

  2. For my portfolio, I was asked to do an assignment on two businesses. I ...

    A private limited company like Vectone Gnanam Telecom issue shares to the owners. Each share represent a share of the company equals one vote therefore a shareholder with more than half of the shares could always outvote the other shareholders.

  1. Introduction to Business Assignment

    They can and are doing this by depositing as little as possible money in the bank because they are not making anything if it is just sitting there. So they are investing in different things i.e. developments so that they can reap the benefits of making a larger return on what they've spent on.

  2. Barclays Investigating a Business

    Growth- As Barclays has already expanded internationally it could be beneficial for them to branch wider as already it has improved their profit margins and brand name. Growth can have complications however as Barclays is already well run and financially stable there is less risk for them.

  1. Investigating Business. Tesco PLC. I will be describing the aims and objectives of ...

    can receive feedback directly from the customers ? such as customers want more tills where they can pay for their products/ services, and if Tesco?s listens and implement more tills then they are meeting the needs of the customers, thus customers will highly value Tesco?s as a business.

  2. Political, legal and social factors impact on businesses The two businesses I will compare ...

    This will allow Tesco to get reasonable prices on the products they wish to buy. However when it comes to selling they must follow the retail recommended price. For example if the RRP was 99p for a packet of cheese then Tesco's should follow that recommended price simply because it is then fair to sell on to their customers.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work