1. Business Ownership in the Private Sector Is this man associated with public or private sector?

2. The Private Sector – Business Ownership Most businesses in Britain are owned by private individuals. They range from small enterprises like a taxi firm to large organisations such as British Airways. They can be owned in the following ways: A sole trader – Generally smallest type of business. Owned by one single owner, but may have several employees. The owner has complete control over every aspect. Examples of sole traders are plumbers, florists, decorators and market traders. A partnership is owned by two or more people who are jointly responsible. Examples include architects, doctors and solicitors.

3. A private limited company – Name of the company ends in ‘Ltd’. The owner(s) are the shareholders and often also run the business. Many family businesses are private companies. A public limited company – generally the largest type of business. The name ends in ‘plc’. The shares are traded on the stock market, meaning the owners are members of the public. The owners (shareholders) do not run the business, instead they will appoint directors who are responsible. Selling shares raises lots of money that the business can use to expand with. A franchise – In this case established businesses appoint franchisees to run outlets. The franchisee must be pay to be able to trade under that brand name. Examples include Subway, McDonald’s, The Body Shop. The Private Sector – Business Ownership

4. Businesses with Unlimited Liability Unlimited companies include: Sole Traders and Partnerships. Unlimited liability means that the finances of the business are treated as inseparable from the finances of the business owner. If the business owes £1,000,000, the owner owes £1,000,000 and can be forced by court to pay for it themselves. This means selling their own private houses and cars etc.

5. Businesses with limited liability Limited companies include: Private Limited companies and Public limited companies. Limited liability means that the legal duty to pay debts run up by the business stay with the business. The debt is not the owners personally. If the company owes £1,000,000 that the company cannot pay. The courts can order the business to sell all of its assets and if that is not enough the business will then be closed. The owner will have no personal liability for those debts.

6. Your Task – Advantages and disadvantages of the different types of business ownership For all 5 types of ownership complete 2 tasks: Task 1 – Create a table of advantages and disadvantages of that form of business. Task 2 – Find an example business of that form. See sole trader example below. AdvantagesDisadvantages Owner is in complete control and makes all decisions Unlimited Liability No argumentsHard to access finance Clear objectivesOnly one person’s ideas Can quickly make decisionsLong hours Cheap to setupHard to go on holiday Be your own bossNo sick pay Set your own hoursStress is all on one person