SGS Business - Business Ownership

A feature of being a sole trader

• Owned by one person

• Owned by 2-20 people

A feature of being a partnership

• Owned by one person

• Owned by 2-20 people

Which of the following professions could be run as a sole trader?

• Plumber, electrician, mobile hairdresser, ice cream van business

• Solicitor, accountant and doctor

Which of the following professions could be run as a partnership?

• Plumber, electrician, mobile hairdresser, ice cream van business

• Solicitor, accountant and doctor

What do sole traders and partnerships have in common?

• They both have unlimited liability - if the businesses get into debt they are liable for all costs and could lose their home.

• They both have limited liability, with shareholders only being liable for the amount they invested into the company.

Explain an advantage of being a sole trader

• As there is more than one owner it is easier to raise capital (money) to start or expand the business

• Easiest and cheapest form of business ownership to set up

Explain an advantage of being a partnership

• As there is more than one owner it is easier to raise capital (money) to start or expand the business

• Easiest and cheapest form of business ownership to set up

Explain an advantage of being a sole trader

• The owner has complete control over the business and can make decisions without consulting anyone else.

• With more than one owner, there are often more skills in the business

Explain an advantage of being a partnership

• The owner has complete control over the business and can make decisions without consulting anyone else.

• With more than one owner, there are often more skills in the business

Explain a disadvantage of being a sole trader

• Decision making is slower as more people own the business

• They can often work long hours and struggle to take holidays and time off when ill, because of the effort required to establish a business.