You set up a Sandwich Shop on the High Street in Folkestone. What type of Business would you run, would you be a sole trader, a partner with another person or become a limited company?
You set up a Sandwich Shop on the High Street in Folkestone. What type of Business would you run, would you be a sole trader, a partner with another person or become a limited company?
A sole trader is when one person has the only share in the company. The best example of this is a window cleaner. But a sole trader doesn't mean that you can't employ people, you could have as many employers as you want it just means that you have the only share in the company.
A partnership is when you go into business with other people the minimum of people in a partnership set by the government is 2 and the maximum is 20. A partnership also doesn't limit you to the number of people you can employ. But the company will have unlimited liabilities this means that if your company goes under my investors can come after me for the money the company owes them. And you can lose everything if you go under
A limited company can be 1 person or numbers of people who have shares in the company but you have to be invited to become an owner in the company by buying shares. But to be a limited company you have to have a minimum of 2 directors. On should be a secretary and one should be a managing director.
For my sandwich shop I would chose a partnership because they are easy to set up, you don't need accountants or lawyers by law but it is advised too because the partner who is keeping the books could swindle the company out of money. A partnership has no external shareholders so the partners keep the profits which would be good for a sandwich company because a sandwich company would not make a lot of money so you don't have to keep paying out money to shareholders. I would have more capital input than a sole trader would. I would have more privacy than a limited company because you don't have to publish your accounts to the public (this will keep costs down). I would also have more expertise in the company because I have more knowledge between the partners; this also would be good for a sandwich shop because one person might specialise in marketing and the other in advertising.
A sole trader is when one person has the only share in the company. The best example of this is a window cleaner. But a sole trader doesn't mean that you can't employ people, you could have as many employers as you want it just means that you have the only share in the company.
A partnership is when you go into business with other people the minimum of people in a partnership set by the government is 2 and the maximum is 20. A partnership also doesn't limit you to the number of people you can employ. But the company will have unlimited liabilities this means that if your company goes under my investors can come after me for the money the company owes them. And you can lose everything if you go under
A limited company can be 1 person or numbers of people who have shares in the company but you have to be invited to become an owner in the company by buying shares. But to be a limited company you have to have a minimum of 2 directors. On should be a secretary and one should be a managing director.
For my sandwich shop I would chose a partnership because they are easy to set up, you don't need accountants or lawyers by law but it is advised too because the partner who is keeping the books could swindle the company out of money. A partnership has no external shareholders so the partners keep the profits which would be good for a sandwich company because a sandwich company would not make a lot of money so you don't have to keep paying out money to shareholders. I would have more capital input than a sole trader would. I would have more privacy than a limited company because you don't have to publish your accounts to the public (this will keep costs down). I would also have more expertise in the company because I have more knowledge between the partners; this also would be good for a sandwich shop because one person might specialise in marketing and the other in advertising.
