1.5.4 Choosing the right legal structure

Candidates should be able to: Syllabus Candidates should be able to: define sole trader, partnership, private limited company, public limited company define franchising, social enterprise, lifestyle businesses, and on-line businesses analyse the advantages and disadvantages of various legal structures assess the impact of growth to plc and stock market flotation

Private or public organisation All organisations in the UK are either part of the public sector or the private sector. If a business is owned by private individuals, it is part of the ______ sector If the business is owned by the state (government), it’s part of the ____ sector What sector contains charities?

Legal structures in the private sector There are four forms of legal structure in the private sector you need to know about. Do you know what they are called?

Research legal structures in the private sector Research the features, advantages and disadvantages of the following and create a table: Sole trader Partnership Private limited company Public limited company

Partnership – Deed of partnership Contains information on: How much money each partner has contributed Who makes decisions How the profits are shared How the partnership can be ended

How do you choose a legal structure? Watch the video and take notes

Social (not-for-profit) enterprise - features Main aim is charitable rather than profit Social enterprise organisation E.g. What happens to any profit made?

Social enterprise - benefits

Social enterprise - drawbacks

Other forms of business ownership in the private sector Franchises – a business which has bought the right to trade under an established name. The franchisor is a company who owns the franchise. The franchisee buys the right to trade. Co-operatives – groups of people who enter business and share the profits

Franchisee – benefits and drawbacks

Franchisor – benefits and drawbacks

They may be less interested in _____ profits and more interested in Lifestyle business This just means a business which fits in with an entrepreneur’s lifestyle e.g. a keen walker might run a business leading guided treks. They may be less interested in _____ profits and more interested in

What is the main difference? Online business What is the main difference? E.g. Uber was valued at $18 billion in 2014 less than 5 years after it launched!