Business Environment Task 1 and Task 2
BUSINESS ENVIRONMENT TASK 1 AND TASK 2
a)Identify the purpose of different organisation giving examples(AC1.1)
Sole trader-it’s a business that is owned by only one person and it can have one or more employees. This type of business organization often succeeds because the owner has total control of businees, the owner keeps all profit and it’s cheap to start-up,but also it can be difficult to raise financial,it may be difficult to specialise or enjoy economies of scale and can also have problems with continuity if sole trader retires or dies.
E.g
* Small retailers * Plumbers * Builders * Beauticians * Internet entrepreneurs * Market traders * Grocers * Butchers
Partenership it’s a business that is owned by 2 or more members, most comonly between 2 and 20.
Partenerships have: * Advantage –spreads the risk across more people - Partener may bring money and resource -partener may bring others skills and ideeas -increased credibility * Disadvantage-have to share profits -less control of business for individual -problems if parteners disagree over of direction of business
E.g. -Motorola, King Sturge consultancy, law firms etc.
Private limited company is a business owned by shareholders, run by directors and liability is limited.
Advantages-limited liability that means that the personal assets of shareholders will not be at risk of being detained by creditors
- Business will not be affected by the status of the owner
- Minimum number of shareholders to start the company needed is two.
- More money can be raised as you can have a maximum of shareholders which is 50.
- Capacity of expansion is higher because it is easy to raise capital from financial institutions
Disadvantages – growth may be limited because of maximum shareholders allowed are 50. * The share cannot be sold or transfered to anyone else without the accord
a)Identify the purpose of different organisation giving examples(AC1.1)
Sole trader-it’s a business that is owned by only one person and it can have one or more employees. This type of business organization often succeeds because the owner has total control of businees, the owner keeps all profit and it’s cheap to start-up,but also it can be difficult to raise financial,it may be difficult to specialise or enjoy economies of scale and can also have problems with continuity if sole trader retires or dies.
E.g
* Small retailers * Plumbers * Builders * Beauticians * Internet entrepreneurs * Market traders * Grocers * Butchers
Partenership it’s a business that is owned by 2 or more members, most comonly between 2 and 20.
Partenerships have: * Advantage –spreads the risk across more people - Partener may bring money and resource -partener may bring others skills and ideeas -increased credibility * Disadvantage-have to share profits -less control of business for individual -problems if parteners disagree over of direction of business
E.g. -Motorola, King Sturge consultancy, law firms etc.
Private limited company is a business owned by shareholders, run by directors and liability is limited.
Advantages-limited liability that means that the personal assets of shareholders will not be at risk of being detained by creditors
- Business will not be affected by the status of the owner
- Minimum number of shareholders to start the company needed is two.
- More money can be raised as you can have a maximum of shareholders which is 50.
- Capacity of expansion is higher because it is easy to raise capital from financial institutions
Disadvantages – growth may be limited because of maximum shareholders allowed are 50. * The share cannot be sold or transfered to anyone else without the accord