Btec Business AssignmentIntroductionSole-TraderA Sole-Trader is a
Btec Business Assignment
A Sole-Trader is a business organisation which is owned and managed by
one person. Implied in this is that ownership is under one person and
this individual could employ a lot of people to work for him.
One key feature of a sole trader is that of limited liability. A
limited liability refers to the situation whereby he or she looses
both the invested capital and private property when the business winds
up. Advantages for a sole trader are that profits would not have to be
shared and decision making would be easy because the sole trader would
not have to consult anyone in decision making.
For a sole trader things would be slightly easy in the sense that
there would be less confusion as everything would go by the way the
individual wants the business to be. It is also a big responsibility
as there would be a need to have a high-level of personal interest and
if the individual does not show this, then it could be a big factor as
to why the business could go bust.
A partnership is a type of business organisation which is owned and
managed by two or more people, usually not any more then 20 people.
The key feature of this type of business is that of profit sharing.
This brings me onto the Partnership Act 1890 which outlines the main
rules of a business in partnership:
* Profits and losses to be shared equally
* No interest on capital
* Equal amount of capital contribution
The deed of partnerships outlines the rights, responsibilities and
duties of partners. Like a contract.
This contract would consist of such things as the name of the
business, the location, the ration of profit sharing and the times
which each partner has to put into the business. It would also contain
the amount of money etc which would be needed to be contributed by
Private limited company
A private limited company specialises mainly in expanding business
growth, these companies are often much larger than a partnership
organization and consist of influencing globalisation.
Private limited company is an organization whereas any one can own it
if they obtain the majority of shares off the company they trade there
stock to in the stock market.
Dependant upon the size of the private limited company the sources of
finance available for them would be such things as suppliers, banks,
factoring, leasing and hire purchase companies, government grants and
loans, venture capital institutions, private share issues and so on,
you will find more information on the main aim of this task just below
on sources of finance.
The disadvantages for a private limited company could be that it could
be difficult to find suitable shareholders and also could be
disagreement between existing shareholders.
Limited liability Company
A limited liability...