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Business Ownership.

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Business Ownership Sole Trader A sole trader is a business that is owned and managed by one person. Sole traders are common in simple businesses and they do not need many people workers. A sole trader can employ workers but the owner of the business makes all of the decisions. Sole traders can include hairdressers, corner shop owners and plumbers and it is the most common type of business in the U.K. An advantage of being a sole trader is that the business is simple and cheap to start up. Also as the sole trader takes all the decisions, they can have full control over their business in all aspects. Another advantage is that the sole trader keeps all the profits made. Lastly sole traders do not need a large amount of capital (money invested into the business) to start up the business. A major disadvantage of being a sole trader is unlimited liability. Unlimited liability means that the owner is responsible for all the debts of the business. ...read more.


Members of a co-operative share any profits that are made. Co-operatives has limited liability meaning that it restricts the financial responsibility of the owners of the business (normally shareholders) to the amount that they have invested. Co-operatives are democratic meaning that each member has a vote regardless of the size of their shareholding. An advantage is that people are attracted by becoming members and receiving a share of profits. Also co-operatives give each member a say in business decisions. Lastly co-operatives allow small businesses some of the advantages of a larger business. However a disadvantage is that co-operatives are short of capital as members only invest small amounts into the business. This makes it harder for co-operatives to compete against larger companies in the same market. Franchises A franchise is a business using the name, image and product of a larger, successful organisation. The franchisor makes all the decisions whilst the franchisee has limited control. An advantage of being in a franchise is that if the franchisor has been successful elsewhere, then it is less risky for the franchisee to think of a new business idea. ...read more.


Also it is much more expensive to start a company than being a sole trader because the company has to go through many legal issues. Public Limited Companies Public limited Companies tend to be larger than private limited companies. All public limited companies have the letters PLC in front of their name. As public limited companies tend to be large, they have many more shareholders than private limited companies. Public limited companies have more shareholders than private limited companies because they are allowed to sell their shares on the stock exchange. The profit retained is reinvested and given as dividends to shareholders. An example of a public limited company is Marks & Spencer. Advantages of being a public limited company is having limited liability but also being able to sell shares on the stock exchange. This helps them to raise capital and therefore help them to develop new products or expand their company. A major disadvantage is that they have their financial information published which is good for competitors and they are usually discussed in papers and television which can attract bad publicity to the business. ...read more.

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