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13 Cards in this Set
- Front
- Back
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What is the public sector of the economy?
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The public sector comprises of organizations accountable and controlled by central or local government.
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What is the private sector of economy?
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The private sector comprises businesses controlled by individuals our groups of individuals.
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What is a sole trader type business?
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A sole trader business is one where one person provides the permanent finance and has full control of the business and is able to keep all its profits
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All sole traders have....
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unlimited liability
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Define Unlimited Liability
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The owner's personal possessions and property can be taken to pay the business' debts
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What is a Partnership?
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A Partnership is an agreement made between two or more people to carry on a business together with the common aim of making a profit
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What is a Sole Trader type business? |
A business where one person provides the permanent finance and, in return has full control of the business and keeps all the profits. |
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Sole Trader- Limited/Unlimited Liability?? |
Unlimited. This can discourage some potential entrepreneurs from starting their own businesses. |
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Advantages of a sole trader business |
Easy to set up - no legal formalities Owner has complete control and is not answerable to anybody else Owner keeps all the profits Able to establish a close personal relationship with staff and customers |
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Disadvantages of a sole trader business |
Unlimited liability- all of owner's assets are potentially at risk. Often faces intense competition from bigger firms. Eg food retailing Difficult to raise additional capital Lack of continuity. As the business is no separate from the owner so when he dies so does the business |
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What is a Partnership? |
A partnership is an agreement made between two or more people to carry out business together with the aim of making a profit |
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Advantages of a partnership business |
Partners may specialise in different areas if business management Shared decision making Additional capital injected by each partner Business losses shared among partners New ideas injected into the business |
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Disadvantages of a sole trader business |
Profits are shared
All partners are bound by the decisions of any one of them
Not possible to raise capital from selling shares
A sole trader taking on partners may lose independence of decision making |
