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

Types of Businesses.

Extracts from this document...


SOLE TRADER- This type of business is owned by one person- although he or she may employ other people to work in the business. A sole trader is someone who decides to own and run his or her own business and most probably uses personal savings as capital to start it up. There is therefore just one person taking all the risks. If the firm is successful then the owner's reward is the profit. The owner can keep all the profit after expenses have been paid (called the net profit), although he or she must pay income tax on this to the Inland Revenue. If the business is unsuccessful then the owner loses money. The concept of unlimited liability means that the owner may also lose his or her personal possessions and be made bankrupt. ...read more.


They have unlimited liability. The main disadvantage is ALL the profit must be shared. FAMILY PARTNERSHIP- Is the same as a partnership except the owners are all part of one family. PRIVATE LIMITED COMPANT (LTD) A Private Limited company is run by shareholders. The business can still remain small. Many private companies are family firms where the family members are the only shareholders. Under European law, one person can set up a private company on his or her own. All the shareholders have protection of limited liability and can lose only the amount of money they have invested no matter how much is owed. Banks are more willing to lend money to limited company's both for start up and for expansion. The company has a separate legal identity from the owners. ...read more.


The shareholders hold shares, but have nothing to do with the day-to-day operation of the company. A plc must have more than �50,000 in paid-up share capital before it can be floated on the Stock Exchange and also needs good financial track record. However, not all plc's choose to have a listing on the Stock Exchange. In case, they are known as unlisted plc's. A public company can still remain small enterprise. The minimum is two directors and two shareholders. Additional finance can be raised in several ways. The company can borrow from a range of financial institutions, issue additional shares or ask for special loans, called debentures. Shareholders except to receive a dividend in return for their investment and will also want the shares to increase in value. If the company is in difficulties and share values fall, then many shareholders may sell which will lower the price further: This can make the company venerable to a take-over bid. ...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. The Business Environment Coursework. Describe the type of business, purpose and ownership of ...

    When someone is offered the job, the personnel department need to take details of personal information about the new member of staff and the accounts department need to organise the wages to be paid. The legal team need to be involved to set up employment contracts.

  2. I have identified four contrasting businesses they are as follows: KFC John Lewis ...

    > The sole trader does not have to publish accounts. > The owner gets to make all the decisions without consulting to no one because he or she is their own boss and takes no orders from no one else.

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

    for Tesco they can find easily about the stock they sold and the remaining stocks they have and it cut the cost of recruitment of employees. Baler Tesco use baler a cardboard crushing machine to crush cardboards Cleaning trolley Tesco uses cleaning trolley which containing various cleaning material maintain in

  2. Introduction to J Sainsbury plc

    Their overall main objective is to make a profit. However, the following quotation is extremely worrying for Sainsbury's financial performance: "Underlying sales at Sainsbury's rose just 0.1 per cent in the six months to October 11, compared with a rise of 6.3 per cent for Tesco, the UK's largest supermarket,

  1. Investigating Businesses

    This will give the business a good reputation and therefore lead to a successful business. Mission Statement This is often simple, memorable and explains what the organisation is in business to do and what it wants to achieve. Mission statements express the organisation's objectives in qualitative terms and many businesses

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

    to differentiate from their competitors and introducing revolutionary services that no other supermarket has done before. For example Tesco?s was the first supermarket to introduce online shopping for groceries; they were also amongst the first supermarkets to offer the self-checkout service ? other supermarkets followed thereafter.

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

    When the auto parts industry reached full development, accelerated technological efforts were made to create a web of local suppliers that would make it possible to meet the growing legal requirements for the national integration of production. Some examples of legal factors that may affect easy jet are: 1.

  2. Applied Business. Investigating a business Preston Manor High School

    year old The school wants to provide a better service; they are providing the best text books, computers, best sports facilities (gym, sports equipments such as rackets, bats and balls) and working equipment facilities for students such as pencils, pens, tables, chairs and books.

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