OCR 1-9 Business 1.3 - Ownership Structure

Disadvantage of a Sole trader:

• Expensive to create

• Hard to employ people

• Doesn't generate much profit

• Unlimited liability

An advantage of operating as a sole trader...

• Owner receives all profit

• No need to pay tax

• Investment from shareholders

• Cheaper advertising

Business ownership in which 2 or more people share assets, liabilities, and profit

• Sole Trader

• Partnership

• Public limited company

• Private limted company

A company with limited liability

• Sole Trader

• Partnership

• Public limited company

• Private limited company

An advantage of a partnership...

• More profit for the owners
• Easier to recruit
• Shared responsibilities
• Unlimited liability

Why does a company issue shares?

• To raise money that can be invested in the business
• To make more profit
• To get more owners
• To allow the business to be sold off

Which of the following is an advantage of a private limited comapany

• You can sell shares openly to anybody around the world
• You can gain more sales as the business is well known
• You can choose your own shareholders that are suitable for the business
• They have unlimited liability

Which of the following would be a reason to alter a company's aim and objectives

• The business has met their previous aims/objectives
• The business has made lots of profit
• The business employs a new owner
• A new financial year

A public limited company...

• Is easier to set up than a private limited company
• Needs to have a minimum of 10 shareholders
• Has unlimited liability
• Must publish all of their accounts to the public

Which of the following is a benefit of operating as a sole trader?

• Autonomy
• Higher sales
• Cheaper costs
• Easier to run