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Does the sole trader business have limited or unlimited liability?
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What are the different types of organization?
unlimited liability: -sole trader -partnership Limited liability: -Ltd (private limited company) -Plc (public limited company)
Characteristic of a sole trader?
the characterististics of a sole trader are: -unlimited liablitity -only one person controls the business which is called the sole trader - financial infomration is only visible for the owner of the business - the sole trader can keep all profit made by the business - it is a unicorporated business
Sole trader disadvantages?
1. unlimited liability- if debt should occur from poor activity of the business the sole trader is responsible for paying it off with their own money, which could result in selling personal belongings. 2. sole trader is 1 person owning and running the business, although they may specialize in what they do e.g. hairdressing, they may not be able to deal with the financial side of running the business. 3. being a sole trader can result in working long hours and can find it hard to take time off when ill or for holidays.
What are the different forms of business organization?
Sole trader Charities Franchiser Private Limited Company
What are the four types of business organization?
Sole trader Charities Franchiser Private Limited Company
Features of private sector?
They are funded by the owners or shareholdersThey have limited liability if they are a limited company such as a LTD and they have unlimited liability if they are a sole trader or partnershipLovee from Mr. Pickles ;)
What is the liability of sole trader?
a sole trader has a limited liability. :)
What are two benefits that sole trader would enjoy when he converts his business to a private limited company?
A sole trader who converts their business to a private limited company can enjoy several benefits. Firstly, a private limited company offers limited liability protection to its owners, meaning that their personal assets are protected in the event of business debts or lawsuits. Secondly, a private limited company is often seen as more credible and professional, which can help to attract investment and increase credibility with customers and suppliers.
Explain the significance of limited liability to sole trader and partnership?
Type Explain the significance of limited liability to sole trader
Sole Trader unlimited liability?
Sole Traders have unlimited liability. This means if the business goes into debt, the owner is responsible, and has to pay every last pence/cent to pay of the debt. This means that they may have to sell personal possessions i.e their house or their car.
What are the different types of organization?
unlimited liability: -sole trader -partnership Limited liability: -Ltd (private limited company) -Plc (public limited company)
Compare a sole trader with a franchise?
Sole trader - where a business is set up by one person Advantages: Has their own say Makes their own decisions. Disadvantages: Unlimited liability - have to pay everything yourself if you lose money. Franchise - where you buy into an existing company e.g. Mcdonalds Advantages: You are part of a well-known company Limited liability - if you lose monet, you only lose what you put in. The company you have bought into will provide the money
What are commenda contracts?
A commenda contract is a contract originating in medieval Italy (10th century) in which a trader on a ship does not have liability for the goods being traded as long as the trader does not break the rules of the contract. The investors have unlimited liability.
Characteristic of a sole trader?
the characterististics of a sole trader are: -unlimited liablitity -only one person controls the business which is called the sole trader - financial infomration is only visible for the owner of the business - the sole trader can keep all profit made by the business - it is a unicorporated business
What are the problems of changing from one legal structure to another?
as you change from being a sole trader to suppose a partnership or a limited liability company you lose control and ownership, but then your business benefits from this and grows
Sole trader disadvantages?
1. unlimited liability- if debt should occur from poor activity of the business the sole trader is responsible for paying it off with their own money, which could result in selling personal belongings. 2. sole trader is 1 person owning and running the business, although they may specialize in what they do e.g. hairdressing, they may not be able to deal with the financial side of running the business. 3. being a sole trader can result in working long hours and can find it hard to take time off when ill or for holidays.
What are the advantages of a sole trader?
Advantages of being a sole trader are that you're your own boss which means you can choose how long you work for. It's easy and doesn't cost much to set up. You get to keep all the profits and also decisions are made faster. Information about the business is kept private unlike limited companies which are made public by Companies House. Sole traders offer a more personal service which is appealing to potential customers in the area where the business is situated.Disadvantages of being a sole trader are if you have time off you won't get paid for it because it's your business. This could lead to fewer profits and also in future could lead to lack of business. Unlimited liability is also a disadvantage. Unlimited liability means if your business fails you have to sell off your own assets for example their car or house to pay off the debts of their business. Sole traders may find it difficult to raise finance to fund their business which may lead to them struggling to expand in the future.Im currently learning about the topic in school and this is what I learnt from textbooks and my teachers I hope it helped :)
