Sole trader- almost all of the business in the o. k. Are owned by sole traders. Sole traders are individuals who have set up a business on their own. If you are a sole trader you have 100% control over what happens in your business. Sole traders are usually small business, which could range from florists to accountants. If you are a sole trader you have unlimited liability. Unlimited liability is when you are responsible for paying al of the debts in which you may have run up. If your business as a sole trader fails you will have to pay your debts or if you don’t you will become bankrupt.
The best thing about starting up a sole trader business is that you are your own boss, you don’t have to share your profits out and it is relatively easy and straightforward to set up. But being a sole trader does have bad points about. To start with it is risky if you aren’t sure what you are doing. You can lose everything think you own if your business goes under because you have unlimited liability. Last of all you work very long hours, and you can’t really afford to be ill or take holidays because you will lose business.
Partnership- a partnership is when two or more people going up to a maximum of 20 own a company. Many businesses are owned by partnerships just like sole traders. Partnership business share out their profits equally and debts if any are run up. This is because partnership start up capital is the same. Partnerships have unlimited liability just like sole traders. If one of the partners runs up a very big debt all of the other partners are responsible for paying it off. So when choosing a partner for a partnership you have to be very careful.
The advantages of setting up a partnership business is that more money can be raised as a start up capital. Each partner shares out the responsibility equally. There is a wider range of skills, which is available for holidays and illness where in a sole trader business cover isn’t usually available. The disadvantages to starting up a partnership business are that disagreements can occur easily. Profits have to be shared out equally no matter what. You have less say in what happens you have to persuade other partners before doing what you think.
All partners have unlimited liability for all the dealings and all of the partners debts. Limited companies- limited companies are companies, which are owned by shareholders. Directors run the company but the directors don’t own the company. The shareholder invests money into the company in return for shares. Each share entitles them to a share to the profits in form of a dividend. The company then employees directors. The directors then run the business, it is common for the directors to have shares in the business that they run.
Limited companies have limited liability the most money that a shareholder can lose is what they invested into the company. Private limited companies are different to public limited companies. Private limited companies are smaller than public limited companies. Shares in private limited companies aren’t for sale to the general public. The people who run the company usually own the share in private limited companies. But both private limited companies and public limited companies have limited liability Co-operatives- there are two types of business, which are co-operatives.
The business, which is co-operative, is a group of people who together produce bigger and better goods and provide better services. Its members own a co-operative business or society. The members have a right voting right and the right to claim discounts at retail shops and services that are owned by that society. Owners of co-operatives aren’t called owners they are called members. Co-operative businesses exist for the benefit of the members. Members of the co-operatives share out the profits, which they made equally.
Franchise- if you are starting out in business as a sole trader and want your company to be a household name like Nike or Sony the answer is to use a franchiser. A franchisee is usually a sole trader they then pay the franchiser money for the use of their name, training, equipment and people. The franchisee has to pay the franchiser a percentage of their profits in return of their image, name etc. there is a risk for the franchiser, that’s why they have ultimate control in the business because the must protect their reputation and image, they will control the products being sold or the service which is being given out o the people.
The advantages of franchise business is that it is easy to get a bank loan from the bank for a franchise, you will receive training and be given appropriate and necessary equipment and you are going into a market which you know all about. The disadvantages of having a franchise business is that that you have to pay a percentage to the franchiser you will not make the ultimate decision, the franchiser will as it is their reputation and they have more to loose.
Public sector- public sector is business, which are controlled and owned. Public sectors are business which are none profit making businesses they rely on money being given to them by the government. Public sectors exist for the benefit of the public. Examples of public sector business are like the BBC, the Post Office, and BT etc. other examples of public sectors business are local authorities. The local authorities look after a wide range of services like the police, fir brigade, hospitals, prisons, schools, libraries etc.