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22 Cards in this Set
- Front
- Back
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Sole trader |
Individual owns business |
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Sole trader advantage |
Simplest way to establish business Able to employ others Complete control over business |
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Sole trader disadvantage |
Unlimited liability Less opportunity to share problems and pool experience |
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Partnership |
2 or more people own the business |
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Partnership advantage |
Get a range of viewpoints and expertise More options to raise finance |
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Partnership disadvantage |
Unlimited liability More difficult to raise capital from outside investors |
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Private limited company |
Owned by shareholders |
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LTD advantage |
Limited liability Able to raise more money from outside investors Shareholders are involved in the long run |
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LTD disadvantage |
Management and ownership may cause conflict Limited liability lost if lenders require personal guarantees |
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Public limited company |
Owned by multiple shareholders |
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PLC advantage |
Flotation is a way of raising finance (create the impression of a reputable business) |
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PLC disadvantage |
Flotation is expensive Original owners may lose control of business Possible conflict between director and shareholders |
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Setting up a limited company |
Register with Companies House Complete Memorandum of Association: Company name Registered office Nature of business Address of at least one director Share capital |
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Private sector |
Owned/run by private individuals |
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Public sector |
Operated by the government e.g healthcare |
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Privatise/nationalise |
Government company made into private sector/private organisation bought by the government |
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Shareholder |
Any individual who owns a share of a limited company |
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Role of a shareholder |
Got a on some company matters Share in the profits (dividends) Hope to see an increase in their share price to sell for a further profit |
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Ordinary share |
Shares that aren't guaranteed a dividend payment (most common type of share and carry the greatest risk) |
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Preferred share |
Shares that are guaranteed a fixed dividend and are often prioritised in the event of insolvency |
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Market capitalisation |
Share price X No. of shares issued |
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Influence on share price |
Ethical behavior Revenue Publicity Never of sales Proposed takeovers Competition in the market Company performance State of economy |
