Buss1 Legal structures and Plans

jeffjordan97's version from 2015-05-09 10:59

Section 1

Question Answer
What is a Sole Trader?A business ran by a single owner, with unlimited liability
What is a Partnership?A business ran by 2-20 people, with unlimited liabilty
Give 2 advantages of Sole TradersMake all decisions - therefore keeping all profits, no administrative costs.
Give 2 disadvantages of Sole TradersLonger hours, Owner is fully responsible if it fails
Give 2 advantages of a PartnershipShared workload, more initial capital available.
Give 2 disadvantages of a PartnershipLoss of control and profits shared, may be disagreements.
What is a Private Limited Company?A business ran by shareholders that have limited liability, shared are distributed privately.
Give 2 advantages of an LtdLimited liability, easier to raise finance (selling shares)
Give 2 disadvantages of an Ltdgreater admin costs, public disclosure of information.
What is Incorporation?The process of legally declaring a corporate entity as separate from its owners.

Section 2

Question Answer
What is a Business Plan?A detailed description of a business, containing their aims, financial and marketing techniques.
Give 2 advantages of Business plansIt provides a clear direction, amkes the entrepreneur aware of the skills they require.
Give 2 disadvantages of Business plansOnly as good as the information supplied (no guarantee), may cause overspending in other areas such as stock.

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