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

What is a Sole Trader?

Extracts from this document...

Introduction

Tecsave History Year Type of Ownership No. Of Outlets 1947 Sole Trader 1 1957 Private Limited Co (Ltd) 56 1965 Public Limited Co (plc) 187 What is a Sole Trader? The sole trader type of business is owned by one person. The sole trader can employ people but these employees are unlikely to be involved in the control, financing or decision-making of the business This type of organisation has unlimited liability which means that there is no limit to the amount of the business's debts that the owner is responsible for. If the business should fail, the sole trader may have to sell personal possessions- e.g. house and car- to pay off the business's debts. Advantages: ? It is easy to set up a business as a sole trader as there are no complicated forms or procedures to follow before you can start. ? Sole Traders usually need less capital to start up. ? Sole traders are their own bosses. Disadvantages: ? Small businesses are seen as more of a risk by financial institutions, so it can sometimes be difficult to raise money to help start a business or to expand it later on. ...read more.

Middle

Advantages: ? The company can raise extra capital by selling more shares in the company and thus giving it more of an opportunity to expand. ? The private limited company has its own legal status, separate from the shareholders. This means that, like people, it can sue and be sued and it can own property. Disadvantages: ? It is more difficult and expensive to set up a limited company than a partnership or sole trader as there is much more administrative work to do. ? The limited company cannot sell its shares on the stock market. What is a Public Limited Company? Only two people are needed to set up a public limited company and there is no upper limit. It had plc at the end of its name, which distinguishes it from a private limited company. Members of the general public, as well as other businesses and financial institutions, can buy shares in a public limited company. Most Public Limited Companies start out as Private Limited Companies. ...read more.

Conclusion

Becoming a private limited company gave Tecsave the limited liability it did not have before when Robbie Peers was a sole trader. Limited liability offers security within the business and means that if the company gets in any debt, the shareholders are not at risk and will not have to give up their own possessions to get the company out of trouble. Later on, in 1985 Tecsave became a Public Limited company with 187 shops in Britain. Becoming a plc. Is a way of raising money as shares in your business can be sold on the stock market to anyone. The money used from selling these shares is useful in a big business in order to expand it and make it even more well known. Tecsave can open even more outlets with the money made selling shares and can also make existing stores even more modern and customer-friendly. To become the leading supermarket in the country, Tecsave will need to have the most stores open in every town. To do this needs money, which is why it was a good idea for Tecsave to change from being a private limited company to a public limited company. ...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. Business Studies

    reason for the consumer to buy * Price including pricing methods - cost, market and competition based - Pricing strategies/tactics - skimming, penetration, loss leaders, price points - Price > Most influential for consumers > Must reflect the position and branding of the business or product Pricing strategies to generate

  2. English for business

    If this is the chosen field, then you will be working at the heart of your company and will gain valuable experience. Marketing staff may work on re-branding a product if it starts to loose popularity or launching the product into new markets overseas.

  1. What is the sole trader? What are the advantages and disadvantages of being a ...

    The owner is responsible for all aspects of the business in the sense that he has to work out the buying and selling, gross profit, net profit personal costs and much more by him or herself.

  2. Compare and Contrast a set of Final Accounts for a Sole Trader and a ...

    At this stage it must be noted that cash books form part of double entry system used by sole traders. This ensures that both businesses can keep track of its available finance, cash and bank transactions are entered immediately. The cash book s ruled off and balanced at the end of the financial year.

  1. Business types The Sole Trader

    The minimum number of partners is two and the normal maximum is twenty, though there are exceptions. Partners normally draw up a written agreement, or partnership deed, which details the various rights and duties of each partner. The agreement covers: * Profit sharing ratios * The amounts of capital to

  2. What would be the advantages and disadvantages and disadvantages or remaining as a privately ...

    Compared with the other business structures, operating as a sole trader is the cheapest option to set up and the easiest to administer. There can be no set-up costs unless a business name is required. In addition, the only administration system required is an accounting or bookkeeping system that produces

  1. Businesses at work introductory - Sole trader

    In this type of business the use of the trading can be used again and again along as all the partner's name are quoted. Two examples of a partnership business are a restaurant and supermarket. The advantages of having a supermarket is that you always have customers coming into the

  2. What would be the most effective way to market a new healthy eating option ...

    A SWOT analysis is a powerful technique for a company to understand its Strengths and Weaknesses, and to look at the Opportunities and Threats it will face. The tool is the first stage of planning and helps marketers to focus on key issues.

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