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OCR unit 1 Ao2

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Introduction

Business studies Unit 1 investigating business Ao1 Different types of business ownership The term ownership means how a business is owned, managed, and financed. There are many different types of ownership. these 6 are the most important. Sole trader Eg. McAuleys Newsagents, Noels Pound Coiner, and R.Bell Fishing, sport, and hardware A sole trader is a business that is owned, managed, and financed by one person. Advantages Sole trader is when a business is owned, managed, and financed by one person. Eg: everyday newsagents, butchers, and bakery. Although the business may have many workers, there is only one owner. It takes very little documentation and is easy to set up a sole trader business organisation. ...read more.

Middle

Although all the profit goes to the owner, a large amount of this would go to bills, stock, and paying wages of staff (limited access to capital). When setting up a sole trader business there tends to be a fair amount of stress and pressure, you will have no time for your family as there are long hours at the start. You will also have a lot of debt building up as to pay bills etc and not a lot of profit, Banks will see your business as a very big risk as many sole traders fail within the first couple of months. Partnership Eg. Doctors, dentists, and solicitors A Partnership is a business that is owned, managed, and financed by 2 or more people. ...read more.

Conclusion

Both partners would be responsible for one partner's debts. Decisions of partners are binding. The distribution of profits can cause problems. The deed of partnership sets out who should get what, but if one partner feels another is not doing enough, there can be dissatisfaction. A partnership, like a sole trader, has unlimited liability. Private limited companies (LTD) Eg; Dallat Grop, The Marine Hotel A business generally ran by family, they usually have 2 shareholders. Advantages There is a divorce between ownership and control. It is easier to raise capital due to having shareholders and banks are more inclined to lend the business capital. the legal position of the company is completely unaffected by the death or retirement of one of its shareholder, Shareholders enjoy the privilege of limited liability, which means they are only liable to meet the debts of the company only to the extent that thy have invested into the business. ...read more.

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