IGCSE Business - Types of Business

What type of liability does a business partnership have?

Which of the following applies only to a Public Limited Company (PLC)

A sole trader is owned and operated by one person ?

In a Public Limited Company shares are sold to the public in the stock market. People who own shares are called ‘shareholders’. They become part owners of the business and have a voice in how it operates. Select 3 advantages of a Public Limited Company?

A partnership is a type of business that has between 2 and [blank_start]20[blank_end] owners. They decide to set up and run a business between them. Partnerships are often found in businesses that provide a professional service, such as [blank_start]lawyers,[blank_end] doctors and accountancy practices. In a partnership, the owners agree a set of rules. These are outlined in a document called a [blank_start]deed[blank_end] of partnership. As an example, this document may specify how profits are allocated, what percentage of the business each person owns, their roles and responsibilities, and the percentage of any business debts that each person would have to pay. The owners in a partnership pay [blank_start]income tax[blank_end] on their earnings.

Some advantages of a partnership: it is usually [blank_start]quick[blank_end] and easy to set up there is [blank_start]shared[blank_end] decision-making by the owners there is shared responsibility for [blank_start]debt[blank_end] by the owners partners bring more skills and ideas there is more [blank_start]capital[blank_end] available to invest

Which of the following is a disadvantages of a partnership

A private limited company can be a small or large business. A private limited company has [blank_start]limited[blank_end] liability and often these types of business have ‘Ltd’ after the business name. An example of this would be ‘Green Construction Ltd’. Any type of business can set up as a [blank_start]private[blank_end] limited company – for example, a plumber, hairdresser, photographer, [blank_start]lawyer[blank_end], dentist, accountant or driving instructor. The owners of a private limited company are known as [blank_start]shareholders[blank_end]. Shareholders have to be [blank_start]invited[blank_end] by the business before they can purchase a [blank_start]share[blank_end] of the business. A share is a portion or percentage of a company. Private limited companies pay [blank_start]corporation[blank_end] tax. Corporation tax is a tax on the profits of a business. One of the main [blank_start]downsides[blank_end] of founding a private limited company is that there is more paperwork to do, because the business has to register with [blank_start]Companies House[blank_end] and file annual financial reports.

Private Limited companies are advantageous because the owners have limited liability and shares in the business can be sold to raise money.

A not-for-profit [blank_start]organisation[blank_end] is a business that aims to do something other than to make [blank_start]profit[blank_end] for the owners, such as providing a public service or [blank_start]helping[blank_end] people. It needs to make enough money to cover its costs, but any surplus is [blank_start]reinvested[blank_end] into the business or used in other ways. One example of a type of not-for-profit organisation is a [blank_start]charity.[blank_end] Charities are businesses whose aim is to raise money for good causes, or to help people, animals and the environment. Businesses with charitable status are funded mainly by [blank_start]donations[blank_end], get some tax relief, and are eligible for certain types of grant. Another type of not-for-profit organisation is a [blank_start]social enterprise,[blank_end] whose aim to help society. Social enterprises make money by selling products or services like a traditional for-profit business, but they use their profits to [blank_start]benefit society[blank_end]. Some examples of social enterprises include businesses such as The Eden Project, The National Trust, The Big Issue, and Divine Chocolate.