A2 Applied Business Unit 8 Business Planning Task 2 Legal Status

 Recap the main types of legal status of a business.  Explain advantages and disadvantages of the different types of legal status.  Develop analytical skills.  Apply legal status to own business ideas. Lesson Objectives

 You have already studied this topic in Unit 1 in Year 12, so this is a revision lesson, of the main types of status that you can choose for your business.  Look at the cards you have been given and sort them into the correct groups.  Ownership_sorting_exercise[1].pdf Ownership_sorting_exercise[1].pdf  Review with class. Legal Status of A Business

Write on the board  Student 1 – State an advantage of being a sole trader  Student 2 – Explain the advantage  Student 3 – Add an effect of the advantage  Student 4 – add another effect  Etc NB Use connectives to link the points together Developing Analysis – Chaining 1

Developing Analysis and Application 2 READ THE CASE STUDY ABOVE

 This is the hierarchy of objectives on which your coursework is assessed.  1 Knowledge & Understanding  2 Application  3 Analysis  4 Evaluation Read the following answers to the question “Explain why Nadir should become a sole trader”. Annotate where you think it has met the assessment objectives. The Assessment Objectives

 Setting up as a sole trader means Nadir will be his own boss, he will make all the decisions and no-one will tell him what to do.  Nadir will get to keep all the profits of his business so he will be working primarily for his own benefit. Answer 1

 The key point is that Nadir has a much better chance of making the garage business a success if he has support from other shareholders. Setting up a business is risky and Nadir is already low on cash. On his own Nadir would place the business in immediate debt of £25,000, which would increase the speed with which the business would need to become profitable, this increases the risk of failure. Therefore Nadir should set up as a company. While he may not like having to discuss decisions with shareholders and share any profits the business makes, it is better for him to have a smaller percentage of a profitable business rather than 100% of a loss making one. Answer 2

 In your business plan write the heading Legal Status.  State the legal status you have chosen for your business. Explain the reasons for your choice and use the assessment objectives in the previous exercise.  Use Point ( Advantage of that legal status e.g limited liability)  Explain ( e.g. what is limited liability)  Effect ( e.g. why is limited liability important for your business)  Make sure you apply (link ) it to your business  You do not need to discuss the types of legal status you have not chosen, but could use them for a comparison that will help evaluate. The Task

 Blockbusters Business Organisation  busters/quiz-busters-game.aspx?game_id=79 busters/quiz-busters-game.aspx?game_id=79 Plenary