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

Types of business ownerships with advantages and disadvatages

Extracts from this document...

Introduction

Types of ownerships with advantages and disadvatages There are a variety of options that you could use in setting up in business, each of which has advantages and disadvantages. It is important that you determine which business type is most suitable for you bearing in mind the number of people involved and the objectives of the business. The main types of business are: * Unlimited Companies * Limited company * Partnership * Sole Trader Sole Trader: Sole trading is when a single person owns the business, which is very a familiar type of business in the United Kingdom. Sole trading is used mainly by 'one man bands' although you are able to employ others in your company. A sole trader usually has no formal or legal processes to set up the business. The Inland Revenue and Social Security authorities must be notified when you set up. It is advisable to set up a business bank account. A sole trader operates the business on his or her own. He or she: * controls, manages and owns the business * is personally entitled to all profits * is personally liable for all business taxes and debts. Sole traders are able to use a trading name but all contracts, even though they may be in the name of the business, will in fact be between the sole trader and the other party and property will be held by the sole trader himself. ...read more.

Middle

* Leadership qualities and management experience. * Level of specialist knowledge and expertise. * The level of trust associated with the partner. Advantages: * The main advantage of a partnership over a sole trader is shared responsibility. This allows for specialisation, where one partner's strengths can complement another's. For example, if a hairdresser were in partnership with someone with a business background one could concentrate on providing the salon service, and the other on handling the finances. This can develop the running of the business, as partners can carry out the tasks they do best at. * More people are also contributing capital, which allows for more flexibility in running the business. * There is less pressure of time on individual partners. This means that partners can get time for holidays or even cover illnesses. * There is someone to consult over business decisions. * There are no legal rules and regulations to complete when setting up the business. * Normally this type of business is larger than sole trader which gives partnerships a stronger position to raise money from outside of the company. Disadvantages: * The main disadvantage of a partnership comes from shared responsibility. * Disputes can arise over decisions that have to be made, or about the effort one partner is putting into the firm compared with another. ...read more.

Conclusion

A franchise is a business relationship in which an owner (the franchisor) licenses others (the franchisees) to operate outlets using business concepts, property, trademarks and trade names owned by the franchisor. Franchise relationships are regulated by each state and by the Federal Trade Commission and are often quite complex. A contract known as a franchise agreement should spell out the details of each particular venture. The franchisor often provides the initial capital for the franchise and, in turn, typically takes in a larger share of future profits. In addition, a franchisor usually provides: * A proven business concept * Name recognition * Business know-how * Experience * Advertising support The franchisee provides: * Supplemental capital * The effort to make the business concept work The franchisor and the franchisee both share in the risks and returns of the business, although each agreement is structured differently. Typically, the franchisee is his or her own boss on a daily basis. The franchisor also has a say in the business. For instance, the franchisor is usually responsible for quality control and for maintaining a uniform image among all franchisees. If the quality is not up to par, the franchisor may direct the franchisee to make changes. Advantages: * Training and guidance is available * There may be brand name appeal * Often there is a proven track record * Financial assistance may be available Disadvantages: * Franchise fees * Franchisor maintains a fair amount of control * Promises may not be realized ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Business, Companies and Organisation, Activity 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 GCSE Business, Companies and Organisation, Activity essays

  1. Type of Business Ownership, sectors, types of bysiness and size of business

    The partnership agreement will specify how profits are shared, but if there is no agreement then the profits will be shared equally. Usually the profits are shared on the basis of capital inputs. Partnerships can be dissolved voluntarily or by court order.

  2. In this section I will explain every one the different types of business ownership. ...

    - Shareholders in public companies expect a steady stream of income from dividends, which might mean that the business has to concentrate on short term objectives of creating a profit, whereas it might be better to work on longer term objectives, such as growth and investment.

  1. Business Studies

    is increase the business profit and sales Expand to new geographic markets - Businesses may decide to expand in areas where their goods/services are distributed - Allows the business to increase profit - Allows the business to achieve a higher level of awareness about the product amoungst an increased number

  2. Exmaining different types of business ownership with examples of each.

    number of customers but they also want their existing customers to buy more so they set lots of deals like buy 1 get one free etc. One of their other purposes is to advertise their shop so they have their own website and they put up posters on buses and around the world, they also run adverts on TV.

  1. Assignment to investigate two types of business organisations - Sole traders and partnerships.

    The owner for the business is completely responsible for all debts of the business up to the limits of his or her personal wealth. The responsibility for debts is called liability; in this case liability is unlimited. This means that the owner can lose all their personal wealth and possession in order to pay off debts of their business.

  2. Job roles and contracts at Alton Towers

    � Pension scheme & Life Assurance, As part of the wider Merlin Entertainments Group, you will enjoy continuous support and opportunities to branch out and develop your career. B2 Contract of employment CONTRACT OF EMPLOYMENT B2 1. Names of the contracted parties Between: Alton Towers (the 'Employer')

  1. Starting a Small Business

    The records that we would need to keep are the accounts for the daily takings, weekly and monthly costs, customer's details and their complaints, supplier's details. The details of business income would need to be kept as well. I would need to send bank sheets in every 12 months as it is a standard procedure.

  2. Importance of Human Resources Management

    This is where managers trust their workers and form a healthy relationship. Both of the theories are used in Ford. Ford uses the theory Y mostly because it helps to maintain the relationship between the managers and the employees. It also encourages the employees to work even harder for those targets set by the managers.

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