Cory Edwards Unit 1 Assignment 1
Different Types of Business Ownership for business ideas and for the solving problems
that the business encounters.
Sole trader Partners share the profits equally. This can lead
A sole trader company and the owner of are to inconsistency where one or more partners
seen as one entity in the eyes of the law aren’t putting a fair share of effort into the
meaning that if the business was to get into running or management of the business, but still
debt the owner of the business would have to reaping the rewards.
personally pay off the debt, this is called Because the partnership is jointly run, it’s
unlimited liability. Any post tax profits are for the important that all the partners agree with what is
owner to keep or to reinvest into the business. being done. This means that in some
As a sole trader you are your own boss circumstances there are less freedoms with
meaning you make all the decisions without regards to the management of the business.
investors intervening this can speed up decision
making but can be hard if the owner is not sure PLC- public limited company
what decision to make. And the owner can set A public limited company (PLC) is a company
their own targets for growth. which has offered shares to the general public
The business owner is able to stay in full control and has a limited liability. A PLC's stock is
of the business and the direction they want it to offered to the general public and can be
go in without investors affecting decision purchased by anyone, either privately, or
making. through trades on the stock market. PLCs are
The business owner keeps all profits with none often large well-known companies
going to shareholders. PLC is more commonly used in the United
Kingdom, but in America Inc is more commonly
Sole traders are seen as one entity by the law used. The use of the PLC abbreviation after the
due to unlimited liability meaning if the business name of the company is used to inform
was to get into debt the owner would have to investors, or anyone dealing with the company
pay it off and personal assets could also be that the company is public and probably fairly
taken to pay off the debt. large.
As a sole trader it can often be very difficult to
raise capital as the business is not open to the Companies listed on the London Stock
stock market or any type of investors. Exchange are PLCs. For example, Domino's
Pizza Group, Barclays, Tesco, BT Group,
Partnership Greggs, Halfords and HSBC. Are all public
A legal form of business operation between two limited companies listed on the London stock
to twenty individuals who share management exchange.
and profits. This type of business has unlimited The 100 largest PLCs on the London Stock
liability meaning if the business gets into debt Exchange are grouped together. The group is
the owners must pay it off. called the Financial Times Stock Exchange 100
(FTSE 100). The companies in this group are
Doctors, dentists and solicitors are typical representative of the United Kingdom's
examples of professionals who may go economy as a whole.
into partnership together and can benefit Because the business can sell shares to the
from shared expertise. public the capital that is raised is usually much
The partners will fund the business with start-up larger than private companies because anyone
capital. This means that the more partners there can choose to invest their money in the
are, the more money they can put into the company. Having the company on the stock
business, which will allow more potential for market could attract a lot more investors.
growth. It also means more potential profit, Offering shares to the public gives the
which will be equally shared between the opportunity to spread the risk of company
partners. ownership among a large number
Partners share the decision making and can of shareholders. Early investors in the company
help each other when they need to. More could sell some shares, and make a profit while
partners means more brains that can be used still retaining a stake in the business.
, Cory Edwards Unit 1 Assignment 1
A company can become vulnerable to a advertisement is done for them. This is good for
takeover if a majority of shareholders agree to the brand owner as it is easy for them to raise
sell their shares in the business to someone capital but if that branch of the business is not
else. With shares being freely transferable, a making a profit this can look bad for the brand
potential bidder can build up the majority of owner when publishing there accounts.
shares easily.
A public limited company has to have its Being a franchise allows the business to
accounts published in full, unlike smaller private
expand quickly. It also allows the brand to raise
companies who can often publish abbreviated large amounts of capital with ease due to many
versions of their accounts. The fuller form of people setting up their business under your
accounts means a public limited company has name.
to disclose more detailed data about the Once the brand owner is happy with how the
business and its performance, this information franchisee is running their part of the business
is accessible by anyone. they can take a step back and almost let the
franchisee continue to grow and run their part of
A PLC company and the owners are seen as the business this means the brand owner
two separate entity in the eyes of the law makes easy money and can put this money into
meaning that if the business was to get into research or new products for the company.
debt the owner of the business would not have The brand owner may feel like they are losing
to personally pay off the debt, this is called control of the business and the original direction
Limited liability. they intended it to go in has been changed by
many franchisees.
Ltd- private limited company
A LTD company and the owners are seen as Charities
two separate entity in the eyes of the law
meaning that if the business was to get into Charities are established with the main of
debt the owner of the business would not have collecting money from individuals and using that
to personally pay off the debt, this is called money to help a certain cause, this cause is
limited liability. often specified in the title of the charity. Even
As a limited company the business profits are though charities are not set up to make profit
taxed this is called corporation tax which is they can make surpluses. Many well-known
currently 19% for a private limited company. charities have been around for a long time and
This is more favourable than the higher tax rate often employ many people. For example Oxfam
paid by a sole trader or a partnership. was started in 1942 and employs thousands of
Being an Ltd is seen to add credibility, which people in the UK alone, they also work in 90
can make it easier to borrow money and raise countries worldwide.
capital with less personal risk.
Provides more privacy of information than a Charities still raise the majority of their finances
public limited company meaning the businesses through voluntary donations, but more and
accounts still have to be disclosed but in a more charities now operate retail outlets as
simpler form. well. Oxfam have their own shops which contain
In a private limited company the owner can new items often produced as a result of their
easily lose control of the business due to development projects, as well as donated items
shareholders who have different opinions on such as books and clothes. These shops have
where the business should be going and how it thrived as vacant premises have appeared on
should be run. high streets up and down the country. Rents are
cheap, and costs are low – often volunteer staff
Franchise work in the shops.
A franchise is usually a well-known brand who
allow other to use their brand name as their Social enterprises
own but this comes at a cost for the person who Social enterprises trade to help solve social
wants to open their own business and use the problems, improve the communities they
name, people usually do this because there is operate in, and improve the environment. Many
much less chance of the business failing and all social enterprises aim to make profits from
Different Types of Business Ownership for business ideas and for the solving problems
that the business encounters.
Sole trader Partners share the profits equally. This can lead
A sole trader company and the owner of are to inconsistency where one or more partners
seen as one entity in the eyes of the law aren’t putting a fair share of effort into the
meaning that if the business was to get into running or management of the business, but still
debt the owner of the business would have to reaping the rewards.
personally pay off the debt, this is called Because the partnership is jointly run, it’s
unlimited liability. Any post tax profits are for the important that all the partners agree with what is
owner to keep or to reinvest into the business. being done. This means that in some
As a sole trader you are your own boss circumstances there are less freedoms with
meaning you make all the decisions without regards to the management of the business.
investors intervening this can speed up decision
making but can be hard if the owner is not sure PLC- public limited company
what decision to make. And the owner can set A public limited company (PLC) is a company
their own targets for growth. which has offered shares to the general public
The business owner is able to stay in full control and has a limited liability. A PLC's stock is
of the business and the direction they want it to offered to the general public and can be
go in without investors affecting decision purchased by anyone, either privately, or
making. through trades on the stock market. PLCs are
The business owner keeps all profits with none often large well-known companies
going to shareholders. PLC is more commonly used in the United
Kingdom, but in America Inc is more commonly
Sole traders are seen as one entity by the law used. The use of the PLC abbreviation after the
due to unlimited liability meaning if the business name of the company is used to inform
was to get into debt the owner would have to investors, or anyone dealing with the company
pay it off and personal assets could also be that the company is public and probably fairly
taken to pay off the debt. large.
As a sole trader it can often be very difficult to
raise capital as the business is not open to the Companies listed on the London Stock
stock market or any type of investors. Exchange are PLCs. For example, Domino's
Pizza Group, Barclays, Tesco, BT Group,
Partnership Greggs, Halfords and HSBC. Are all public
A legal form of business operation between two limited companies listed on the London stock
to twenty individuals who share management exchange.
and profits. This type of business has unlimited The 100 largest PLCs on the London Stock
liability meaning if the business gets into debt Exchange are grouped together. The group is
the owners must pay it off. called the Financial Times Stock Exchange 100
(FTSE 100). The companies in this group are
Doctors, dentists and solicitors are typical representative of the United Kingdom's
examples of professionals who may go economy as a whole.
into partnership together and can benefit Because the business can sell shares to the
from shared expertise. public the capital that is raised is usually much
The partners will fund the business with start-up larger than private companies because anyone
capital. This means that the more partners there can choose to invest their money in the
are, the more money they can put into the company. Having the company on the stock
business, which will allow more potential for market could attract a lot more investors.
growth. It also means more potential profit, Offering shares to the public gives the
which will be equally shared between the opportunity to spread the risk of company
partners. ownership among a large number
Partners share the decision making and can of shareholders. Early investors in the company
help each other when they need to. More could sell some shares, and make a profit while
partners means more brains that can be used still retaining a stake in the business.
, Cory Edwards Unit 1 Assignment 1
A company can become vulnerable to a advertisement is done for them. This is good for
takeover if a majority of shareholders agree to the brand owner as it is easy for them to raise
sell their shares in the business to someone capital but if that branch of the business is not
else. With shares being freely transferable, a making a profit this can look bad for the brand
potential bidder can build up the majority of owner when publishing there accounts.
shares easily.
A public limited company has to have its Being a franchise allows the business to
accounts published in full, unlike smaller private
expand quickly. It also allows the brand to raise
companies who can often publish abbreviated large amounts of capital with ease due to many
versions of their accounts. The fuller form of people setting up their business under your
accounts means a public limited company has name.
to disclose more detailed data about the Once the brand owner is happy with how the
business and its performance, this information franchisee is running their part of the business
is accessible by anyone. they can take a step back and almost let the
franchisee continue to grow and run their part of
A PLC company and the owners are seen as the business this means the brand owner
two separate entity in the eyes of the law makes easy money and can put this money into
meaning that if the business was to get into research or new products for the company.
debt the owner of the business would not have The brand owner may feel like they are losing
to personally pay off the debt, this is called control of the business and the original direction
Limited liability. they intended it to go in has been changed by
many franchisees.
Ltd- private limited company
A LTD company and the owners are seen as Charities
two separate entity in the eyes of the law
meaning that if the business was to get into Charities are established with the main of
debt the owner of the business would not have collecting money from individuals and using that
to personally pay off the debt, this is called money to help a certain cause, this cause is
limited liability. often specified in the title of the charity. Even
As a limited company the business profits are though charities are not set up to make profit
taxed this is called corporation tax which is they can make surpluses. Many well-known
currently 19% for a private limited company. charities have been around for a long time and
This is more favourable than the higher tax rate often employ many people. For example Oxfam
paid by a sole trader or a partnership. was started in 1942 and employs thousands of
Being an Ltd is seen to add credibility, which people in the UK alone, they also work in 90
can make it easier to borrow money and raise countries worldwide.
capital with less personal risk.
Provides more privacy of information than a Charities still raise the majority of their finances
public limited company meaning the businesses through voluntary donations, but more and
accounts still have to be disclosed but in a more charities now operate retail outlets as
simpler form. well. Oxfam have their own shops which contain
In a private limited company the owner can new items often produced as a result of their
easily lose control of the business due to development projects, as well as donated items
shareholders who have different opinions on such as books and clothes. These shops have
where the business should be going and how it thrived as vacant premises have appeared on
should be run. high streets up and down the country. Rents are
cheap, and costs are low – often volunteer staff
Franchise work in the shops.
A franchise is usually a well-known brand who
allow other to use their brand name as their Social enterprises
own but this comes at a cost for the person who Social enterprises trade to help solve social
wants to open their own business and use the problems, improve the communities they
name, people usually do this because there is operate in, and improve the environment. Many
much less chance of the business failing and all social enterprises aim to make profits from
