Btec Level 3 in Business, Unit 1 the Business Environment
Task 1 Describe the type of business, purpose and ownership of 2 contrasting types of businesses.
Sole Trader
A sole trader is a business owned by 1 person. It does not have limited liability meaning that if it fails and creates debts the owner is personally responsible for this.
Sole trader’s usually have to work long hours and learn about all the aspects of business as many start up businesses cannot afford to hire people to take on other tasks.
The owner is responsible for everything that goes on in the business and has to do a lot of work. The owner also receives all the profit and is able to make decisions on their own.
The owner has full control over the business.
Hair dressers, small independent shops and book keepers are usually sole traders.
Partnership
A partnership is a lot like a sole trader only there are more than 1 owner.
This usually means the work and responsibility is shared and so are the profits.
Good examples of partnerships are dentists, accountants and lawyers.
There is usually more money and ideas that can be put into the business.
There may be disagreements between partners and this can affect the way they run their business.
Depending on what contracts were drawn up, one of the owners may decide to leave and leave debts to the other owner or owners. Each partner has to take the risk of full responsibility for the business.
Private Limited Company
A limited company is separate from its owner. This means if the company is sued or creates debts, they cannot take money from the owner. This means that an owner can only lose what they have put into the business and nothing more.
A limited company is usually a fairly small business and has up to 50 shareholders. The amount of profit received depends on the amount of shares held. Decisions usually need to be agreed with by all shareholders. It can be hard to keep all shareholders happy.
Shares are usually held by other people running the business and friends or family, it is usually
Sole Trader
A sole trader is a business owned by 1 person. It does not have limited liability meaning that if it fails and creates debts the owner is personally responsible for this.
Sole trader’s usually have to work long hours and learn about all the aspects of business as many start up businesses cannot afford to hire people to take on other tasks.
The owner is responsible for everything that goes on in the business and has to do a lot of work. The owner also receives all the profit and is able to make decisions on their own.
The owner has full control over the business.
Hair dressers, small independent shops and book keepers are usually sole traders.
Partnership
A partnership is a lot like a sole trader only there are more than 1 owner.
This usually means the work and responsibility is shared and so are the profits.
Good examples of partnerships are dentists, accountants and lawyers.
There is usually more money and ideas that can be put into the business.
There may be disagreements between partners and this can affect the way they run their business.
Depending on what contracts were drawn up, one of the owners may decide to leave and leave debts to the other owner or owners. Each partner has to take the risk of full responsibility for the business.
Private Limited Company
A limited company is separate from its owner. This means if the company is sued or creates debts, they cannot take money from the owner. This means that an owner can only lose what they have put into the business and nothing more.
A limited company is usually a fairly small business and has up to 50 shareholders. The amount of profit received depends on the amount of shares held. Decisions usually need to be agreed with by all shareholders. It can be hard to keep all shareholders happy.
Shares are usually held by other people running the business and friends or family, it is usually