1. Sole Traders Private Limited Companies Co-Operatives State Owned Companies Franchises Forms of Ownership In this chapter we will look at:

2. Very Important *The next slide is the most important slide in the topic and you must fill in and learn this off by heart*

3. Sole TraderCo-operativesState Body Private Limited Company Set up Ownership and control Liability Example Formation Procedure Profits Advantages Disadvantages

4. Sole Traders The Sole Trader owns and runs their own business. The Sole Trader is the one who makes all decisions and provides the money in their business

5. Make A List Are there sole traders in Johnstown or surrounding areas?

6. The following are the steps involved in setting up a Sole Trader Business 1.Decide what type of business you want to go into- e.g. barbers/ pub 2.Find a suitable premises 3.Register your business with the Register of Businesses- however if you want to use your own name you do not have to register and can begin trading immediately 4.Apply for a licence if you need one- e.g. for pubs/bookmakers/taxi driver

7. Sole Trader Advantages Full Control- Can make all decisions quickly Keeps all the profit- Don’t have to share with anyone Can open and close when you like Easy and cheap to set up- a licence may/may not be needed Disadvantages UNLIMITED LIABILITY-CAN LOSE YOUR OWN PROPERTY TO PAY DEBTS The sole trader provides all finance to start the business The owner makes all big decisions alone-can’t be an expert in everything Hard to compete with larger businesses

8. Private Limited Companies Formed when between 1 and 50 people put together money to start a new business. The people who put money in are called shareholders. If the company makes a profit, shareholders receive a dividend. The dividend received depends on the amount of shares you invest. 1 share = 1 vote, the more shares, the more votes. Shareholders have Limited Liability, and the words ltd come after the company name

9. Private Limited Companies Advantages LIMITED LIABILITY- ONLY LOSE WHAT YOU PUT INTO THE BUSINES Can raise money by selling shares When a shareholder dies the business keeps going As the company expands it can employ more experts Disadvantages Profits are shared More expensive to set up Many Legal Requirements- Documents to fill in etc.. The original founders can lose control if bought out

10. Homework Questions What is a sole trader? Give an example. What is a Private Limited Company? Give an example. Compare Sole Traders and Private Limited Companies under the following headings: Set Up (How it is formed) Ownership and Control (Decision Making) Profits (How are they divided up) Finance (Investment) Risk (liability) Size Example

11. Co-Operatives Co-operatives pool resources to achieve common goals, which as individuals they may not achieve alone. The people who set it up are called members and all profits go to the members Co-operatives have LIMITED LIABILITY which means… Each member has one vote regardless of the amount of shares they own

12. Co-Operatives Advantages LIMITED LIABILITY All members have an equal say Create Employment Achieve more collectively than individually Disadvantages Usually too small to compete with large companies Less of an incentive to invest because one vote is one share Managerial appointments sometimes based on popularity rather than ability

13. State Owned Companies Formed by the Dáil and owned by the state with a board of directors appointed to run them When a government sells a State- Owned company it is called privatisation If the government takes over a company it is called nationalisation

14. State Owned Companies

15. Advantages vs Employment. Provide Essential Services Profit-Income for State Keep control over natural resources.-Oil/Gas Provides Essential Services Profit Control over Natural Resources State Owned Companies Disadvantages May make a loss Loans May Make a loss Loans

16. Franchising is a business arrangement whereby one person (franchiser) sells the right to use their name, idea or business to others (franchisees) and allows them to set up an exact replica of that business. A franchise is effectively a licence to produce and/or sell another well- known company’s products and use the company’s name. The franchiser trains and advises the franchises in all aspects of running the business. He also lays down strict rules that all franchisees must obey. The product sold or produced must conform strictly to these conditions laid down by the company granting the licence. What is Franchising

18. Homework Complete the next slide fully and study each topic carefully for class test

19. Sole TraderCo-operativesState Body Private Limited Company Set up Ownership and control Liability Example Formation Procedure Profits Advantages Disadvantages

20. Sole Trader Co-OperativeState Body Private Limited Company Ownership Owned by one personOwned /run by membersOwned by the governmentBetween 1-50 shareholders own Control One person has complete control and total responsibility Each member has one vote (regardless of how many shares you own), to become a member you buy a share. It is managed by a committee Minister responsible but appoints a board of directors to run on a daily basis. Each share carry’s a vote, more shares more control. Liability Unlimited, therefore you can lose your personal assets if the company fails Limited liability; therefore you only lose what you invested. Tax payer suffers the burden of failure/loss Limited liability and have the letters LTD after their name. Examples Retails/services (local butcher)Credit UnionCIE, FAS, RTE,ESBDunnes Stores Formation procedures Easy to set up, few legal requirement, register for tax 8 people required, apply to register of friendly societies, a certificate of incorporation is issued and you must report annually to the register of friendly societies. Formed by passing an Act in the Oireachtas Costly to set up, legal requirements; memorandum/articles of association, declaration of compliance, statement of capital. Profits Keeps all profits but suffers all lossesDivided among members Re-invested or given to the government Distributed in a form of dividend Advantages Keep profit, total control, personal relationship with customers, Equal vote per member, limited liability, members committed to the co-op Provides essential services, create employment Limited liability, extra capital available, continuity of existence Disadvantages Unlimited liability, hard to expand, limited ideas, long hours Lack of finance, no incentive to buy more shares, committee may lack expertise Inefficient, loss making, monopoly Difficult to set up, share not transferable to the general public.