1. Sole traders and partnerships
Types of Ownership (1)
Sole traders and partnerships

2. Types of Ownership
Businesses can be organised in many different ways, depending on their size and activities
Most small businesses are organised as either:
A sole trader
A partnership
Pupils to make notes
This should be revision for pupils, so they should be able to contribute to Q & A session

3. What is a sole trader?
A sole trader is a business owned and run by just one person
The owner may employ other people to work in the business
Pupils to make notes

4. Why operate as a sole trader?
The owner gets to keep all the profits
He makes all the decisions
The business is easy to set up – no paperwork!
Business affairs can be kept private
Pupils to make notes

5. What are the disadvantages?
Nobody to ask for help or advice
Difficult to take time off for holidays or illness
Often have to charge higher prices than larger businesses e.g. small grocer vs. supermarket
The owner has unlimited liability for all debts…..
Pupils to make notes
Find out more!

6. What does unlimited liability mean?
This means that the owner has to pay for any losses the business makes
If he does not have enough money he may have to sell his house or car to pay the debts!
Pupils to make notes

7. What is a partnership?
A partnership is a business owned jointly by 2 up to 20 people
The partners own and run the business together
Pupils to make notes

8. Why operate as a partnership?
The partners can share the workload, and it is easier to get time off
There is more than one person investing money in the business
They can share the decision making
Partners may have expertise in different areas
Pupils to make notes

9. What are the disadvantages?
Have to share the profits!
Partners may disagree on how to run the business
Partners have unlimited liability (except for sleeping partners)
Pupils to make notes

10. What is a sleeping partner?
Invests money but takes no part in the running of the business
Can register for limited liability
This means he is not liable for all the debts of the business – only the amount he originally invested
Pupils to make notes

11. Setting up a partnership
Partners should draw up a Deed of Partnership
This is a document which sets out how the partnership will be run e.g.
How much money each partner is investing
How profits are to be shared
The duties of each partner in the business
Pupils to make notes