(1) Define the term “sole trader” (2 marks)
(2) Explain why there are so many sole trader businesses in the UK (4 marks) (3) List two advantages and two disadvantages of setting up in business as a partnership (4 marks) (4) Who owns a partnership? (2 marks)
(5) Briefly outline the purpose of the partnership agreement (3 marks) (6) What is the difference between “unlimited liability” and “limited liability” (4 marks) (7) Do the members of a partnership enjoy limited liability? (2 marks) (8) Identify the main advantages of using a private limited company for a business start-up (6 marks) (9) Define the term “shareholder” (2 marks)
(10) List three examples of “not-for-profit” businesses (3 marks) (11) Define the term “social enterprise” (2 marks)
1) A sole trader is a company started and run by one individual, hence the word ‘sole’. A sole trader can also employ people and he/she owns all the business assets personally and is personally responsible for the business debts. A sole trader has unlimited liability. 2) Firstly, Control of the business. Being a sole trader means you have full control over your business meaning that it can be run however the owner wants it to run giving the owner almost complete control. As they have control all profits made are then kept for the sole trader for them to do as he/she pleases. Secondly, Specialising. Often a small business, sole traders can offer a more personal service with local roots. This can be more appealing to potential customers in the local community and people will pay more for a service that fits their needs exactly. For the reasons above, this is why so many sole trade companies open in the UK.
4) From 2 – 20 people can own the partnership. There will be a percentage each for each person in the partnership. 5) Where a business is started and owner by more than one person. The legal Partnership Agreement sets out how the partnership is run, covering areas such as how profits are to be...
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