1. Task 1 - Finish exam Question from last lesson
Task 2 – New date and title:
Tuesday 19th January
2.1.3 Liability
Task 3 – Answer Question 1a on P159

2. Business Ownership

3. Sole traders Partnerships
Private Limited Companies (LTD)
Public Limited Companies (PLC)
At least 1 shareholder, 1 director, 1 secretary
At least 2 shareholders, 2 directors, qualified Company secretary
Easy to raise finance as has a good credit rating and high status
One owner
Two to 20 partners
Smallest form of ownership
Profits shared between partners
Small to medium sized organisation
Large organisation, high status
Needs at least £50,000 of finance before able to sell shares
Most common type of business in the UK
Expertise available through partners
Sells shares to family and friends
Shares sold on stock exchange, sold to public
Shares sold easily to public
Owner has total control over business decisions
Must register company with Companies House
Unlimited Liabilities
Must register company with Companies House
Lots of rules and regulations to comply with
Easy to set up
May be divisions between shareholders and managers
Owner keeps all the profits
Financial records must be declared at the end of ever year
Financial records must be declared at the end of ever year
Yearly dividends paid to shareholders
Unlimited Liabilities
Annual report must be published to shareholders
Annual report must be published to shareholders
Easy to set up
Limited Liabilities
Limited Liabilities

5. Sole Trader One owner Smallest form of ownership Unlimited Liabilities
Most common type of business in the UK
Owner has total control over business decisions
Owner keeps all the profits
Unlimited Liabilities
Easy to set up

6. Sole Trader One owner Smallest form of ownership Unlimited Liabilities
Most common type of business in the UK
Owner has total control over business decisions
1 – Discuss with the person next to you, whether you would start a business as a Sole Trader
2 – Write a short paragraph in your book on:
What are the benefits to being a sole trader?
Owner keeps all the profits
Unlimited Liabilities
Easy to set up

7. Partnership A partnership has between 2 - 20 owners.
The partners have unlimited liability – if the business goes bankrupt they can lose personal possessions.
Partners share the risks, can both put in ideas and share the profits.
Disagreements may occur.
A Deed of Partnership is a legal document which may be drawn up to agree the details of the partnership

8. Limited Companies The company is separate to the people who own it
It issues shares
Limited stands for ‘Limited Liability’ which means if the company runs into debt, the amount that the shareholders can lose is limited to the money they have invested.
Shareowners own the company and elect directors to run it

9. Private v Public Limited Companies
Have the letters ‘ Ltd’ or the word ‘Limited’ after their name
Shares are privately owned and can only be sold with the permission of the shareholders
Generally few shareholders
Generally greater control by the share owners
Lever Brothers Ltd were a private limited company
Public:
Have the letters ‘plc’ after their name
Shares are openly traded on the Stock Exchange
Generally greater numbers of shareholders
Control is delegated to directors/managers
Unilever Plc now has this types of ownership

10. Franchises The franchisee:
Pays a start-up cost – this covers equipment and sometimes a premises.
Pays a royalty each year – this is a percentage of the revenue earned.
Must follow the rules laid down by the franchisor.
The franchisor:
Provides equipment and resources
Provides training

11. Franchise
Franchise: The right given by one business to another to sell its goods or services using its name
Ben and Jerry’s started to franchise their brand in 1981.
Brand – “a named product which customers see as being different from other products” 11

12. Advantages of franchising (for the franchisor e.g. Ben and Jerry’s)
Can be a rapid method of expansion
The franchisee shares some of the risk of expansion.
Can be a good way of expanding into overseas markets as franchisee will have knowledge of the local market.

13. Disadvantages of franchising (for the franchisor e.g. Ben and Jerry’s)
Lose some control over the brand
A bad franchisee might affect the image of the brand for the whole company.
The franchisor will only receive part of the profit earned by the franchisees.
A franchisee will gain detailed knowledge of the company and may set up a competitor

14. Activity
Create a poster containing the logo and two key facts for sole traders, partnerships, private limited companies, PLCs and franchises.
I want at least two for each type of business ownership
Sole Trader Partnership
Private Limited PLC
Company
You only have 10 minutes!
all posters to me when you’re done –

15. Extension activity
Use Google to find out what the word stakeholders means for business.
Create a list of all of the different types of stakeholder