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Btec Business AssignmentIntroductionSole-TraderA Sole-Trader is a business organisation

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Btec Business Assignment Introduction Sole-Trader A Sole-Trader is a business organisation which is owned and managed by one person. Implied in this is that ownership is under one person and this individual could employ a lot of people to work for him. One key feature of a sole trader is that of limited liability. A limited liability refers to the situation whereby he or she looses both the invested capital and private property when the business winds up. Advantages for a sole trader are that profits would not have to be shared and decision making would be easy because the sole trader would not have to consult anyone in decision making. For a sole trader things would be slightly easy in the sense that there would be less confusion as everything would go by the way the individual wants the business to be. It is also a big responsibility as there would be a need to have a high-level of personal interest and if the individual does not show this, then it could be a big factor as to why the business could go bust. ...read more.


This would generally be a tax advantage. Disadvantages of Limited Liability Company * Limited Life: Corporations can live forever, whereas a LLC is dissolved when a member dies or undergoes bankruptcy. * Going Public: Business owners with plans to take their company public, or issuing employee shares in the future, may be best served by choosing a corporate business structure. There are many sources of finance available to these types of businesses, such as: a. Retained-Profit. Retained Profit is one way of saying how you would re-invest into your business using the profit you make or any other source of finance. Reinvesting would be very helpful in the sense that falling into debt would be of less chance and there would also be no interest being paid. The only disadvantages would be that reinvesting into the business again would reduce the amount of profit or revenue which is received by the owner and it would also make a limited amount of capital to be available. b. Bank Loan. Other ways of financing a business would be to apply for a Bank Loan. ...read more.


There is not normally any money back guarantee on this. g. Personal Savings Lastly u have you're own Personal savings which could be used as a source of finance for the business. This is superior as there would not be any need for negotiating as you would have to when applying for a loan etc. Ultimately, there are two main sources of finance which is divided into two key elements; these two figures are internal sources and External sources. Internal sources are as already mentioned, divided into 4 main categories which are personal savings, retained profit, working capital and the sale of assets. The sale of assets could be anything that needs to be sold for the business to carry on. These are normally the fixed assets such as; land, buildings, fixtures and fittings, machinery and vehicles etc. Businesses normally tend to sell their fixed assets when they are in great desperation of cash, because of this, a lot of organisations decide to stop offering certain products so more money is saved, and at the same time sell their fixed assets. There is one disadvantage in this and this could be that by selling fixed assets they could reduce the amount of product which may be produced or could be used in the working environment. ?? ?? ?? ?? 1 ...read more.

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