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

Business- Unit 1, Task 2

Free essay example:

Emily Bolton                Task 2

Task 2

Business ownerships.

The different types of business ownerships are:

Sole trader.

When only one person owns the business. They do not share the profits with anyone; a sole trader is somebody who controls his/her own business. Have unlimited liability. They can employ people to help them at work but they have sole responsibility of the business.

The advantages of being a sole trader are:

  • Make own decisions.
  • Does not have to share profits.
  • Always know what is happening in business as they make all the decisions.
  • Control of business cannot be lost.
  • Easier to set up own business.
  • Little capital is needed when setting up a sole trader.
  • Management is simpler.
  • More self esteem when they own their own business.

The disadvantages of being a sole trader are:

  • Because the business has unlimited liability is means that if the business in unsuccessful the sole trader will have to pay back all the businesses debt.
  • The sole trader can become extremely stressed because they are in full control of the business.
  • Not much time off, unless someone else takes over.

Franchise

When big companies are owned by sole trades. The two main parties involved are the franchisee and franchisor. The franchisor allows the franchisee to use the businesses name, product and layout in return for a share of the profits made.

The advantages of being a franchise are:

  •  The business can expand.
  • Franchisee’s get a chance to run the business for a greater chance of success.

The disadvantages of being a franchise are:

  • If the franchisee is unsuccessful the business may get a bad reputation.
  • The franchisee cannot make decisions without the franchisors authorisation.
  • The franchisee does not automatically have their agreement renewed.

Partnership

A partnership usually involves between 2-20 people. The profits made has to be shared among all workers. Legal documents such as the Deed of partnership have to be signed before the business can begin.

Advantages of being a partnership:

  • There is more than one person in charge.
  • Ideas can always be shared.
  • Everyone can be part in the area they are most strongest in.

Disadvantages of being a partnership:

  • Arguments may occur.
  • Partners have unlimited liability so they will be less willing to invest.
  • The legal documents have to be completed, and this process may take a while.

Public limited company (PLC):

Is usually a larger business, they employ far more people than a private limited company. Shares can be bought and sold by members of  the public on the stock market. The prices of shares vary.

Advantages of being a public limited company:

  • PLC can raise capital easily.
  • All shareholders have limited liability.

Disadvantages of being a public limited company:

  • Because shareholders of a PLC are members of the public, control of the business can be lost is someone buys a great number of shares.
  • Shareholders may feel isolated because they don’t know each other.

Workers/ retail Co-operative

A workers co-operative is owned and run by the whole work force so there will be no arguments between the owners and workers as they are the same people. People who own part of workers co-operative are called members. Membership of workers co-operative tries to ensure that everyone has a say in how the business is run. All members are in control of the business.

Retail co-operative shares its profits amongst its members. People who own a share of the retail co-operative is called a member. The first retail co-operative was set up in Rochdale in 1844.

Advantages of workers co-operative:

  • No arguments.
  • Happier environment.
  • Work harder.
  • More motivated because they know they will receive a share out of the profits.
  • Opinions are heard.

Disadvantages of workers co-operative:

  • Long time for decisions to be made.
  • Business may suffer, because there are no specified leaders.
  • Not many people have faith in co-operatives so they are not always well supported.

Private limited company (LTD)

People who own part of a private limited company are called shareholders. Family and friends can only buy shares for a private limited company.

Advantages of a Private limited company:

  • Family & friends can only buy shares.
  • Capital can be raised because there is no limit on the number of shareholders.

Disadvantages of a Private limited company:

  • Shareholders may argue or disagree.
  • Restrictions for selling shares.
  •  Competitors.

Tower colliery

Tower Colliery is a Worker co-operative this means that the business is owned by all of its workers. There isn’t one main person in workers co-operative because they all own it.

It is a limited liability business as it is a worker co-operative, as it is the work forces problem if the company is in debt. Tower colliery has a legal status.

Tower Colliery suits their workers co-operative as all the workers get an opinion on how the business is run and also they get a share of the profits.

Tower colliery is a medium sized business.

Some of the advantages of being a worker co-operative are:

  • Happy workers; because views and opinions are heard.
  • More motivated; because they know they will receive a share of profits.
  • Work harder; because it is owned by the workface.
  • No arguments; because they are on the same level.

Some of the disadvantages of being a worker co-operative:

  • Decisions; will take longer to make them.
  • May suffer; because there are no specified leader which could result in failing to reach aims.
  • Support; few people have faith in co-operatives so they are not always well supported.

Spar

Spar is a Franchise ownership as it is owned by a family. The only one person that owns spar is the franchisee because they have brought a branch of the group that own ‘Spar’. It has limited liability.

It has legal status.

Some advantages of being a franchise are:

  • Because they have so many shops around there is more profit being made.                  
  • The business can expand.
  • Franchisees get the chance to run business that has a greater chance of success than for example, a sole trader does.

Some disadvantages of being a franchise are:

  • If the franchisee is unsuccessful the business may receive a bad reputation.
  • The franchisee cannot make any decisions without getting permission off the franchisor.
  • The franchisee does not automatically have their agreement renewed: the agreement has to be renewed regularly. This may create uncertainty for the franchisee.

This store may suit ‘Fred’ because he may live closely to this branch and it sells everyday products that he may need so he doesn’t have to go to a larger store which is further away.

68715

This student written piece of work is one of many that can be found in our GCSE People in Business section.

(?)
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

Related GCSE Business Studies Skills and Knowledge Essays

See our best essays

Related GCSE People in Business essays

  1. Btec Business UNIT 1

    milk and bread section, toilets etc. HR will be setting/organising working conditions for example, time spent working and time given off work too e.g. holidays. Organising work and making sure employees are happy by getting paid at the right time and the right amount.

  2. Classify the business according to its ownership - McDonalds

    Provide them information about the business they want. Benefits: The benefits of using internal communication are: * The benefit of using intranet to business is that it provides a fast and up-to-minute source of information for McDonald's restaurant management and staff.

  1. Business- Unit 1, Task 1

    All the workmen had to pay around �8000 each as a deposit to pay for the coalmine.

  2. Report: Type of ownership of J-Sainsbury

    target group at whom the product is aimed, how the product benefits the customer (the unique selling point) and the product image. The team will then work out the best possible strategy for marketing the product. For example, this may involve TV or magazine adverts, in-store promotions (e.g.

  1. The Boots organisation is a public limited company (PLC).

    Job vacancies in Boots are placed in the appropriate media. This gives Boots the chance to attracting more suitable candidates. Short listing Short listing is a key stage in the recruitment process in Boots. Elimination skills are vital. For a business like Boots it is vital to quickly eliminate applicants that do not meet the criteria.

  2. As a short-term business Consultant, I have been hired by Alton Towers PLC to ...

    This responsibility will motivate them into doing high standard and high quality work. If the employees are putting their best efforts into making the business run well then it is help towards achieving the aims and objectives set. * If the employees are performing to the best of their ability

  1. LEARNING AGREEMENT

    This is very disappointing because I believe many companies fail to see the importance to practice a safe workplace and concern about the welfare of its employees. Even though an emergency situation is unlikely to happen in a commercial office, it is very important that the staff know what to do when an emergency situation occurs.

  2. unit 2 business coursework - M&S a company overview

    2000 - Our 'Count on Us' range of food products was launched. 2000 February - In February Luc Vandevelde took up his position as the new Chairman and in September the roles of Chief Executive and Chairman were merged. 2000 March - The Autograph Designer Collection was launched aimed at women who want to buy designer clothing at affordable prices.

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