In this assignment I am going to be talking about two different businesses I have chosen, their purpose and different types of business ownership.
Business ownership is the way a company is owned depending on which sector they lie within. There are public, private and voluntary sectors. In the public sector the government will own the business or the government will choose agencies that will provide the service for them whereas in the private sector businesses are owned by individuals. An individual owner may want to run their business on their own or sell shares of the company to other people who will become share holders. The owner may also choose to run their business with someone who will become their business partner. In case of the voluntary sector businesses usually choose groups of trustees, responsible for looking after the organisation. I am going to talk about different types of ownership in more detail below.
Sole trader means a business which is owned by an individual who controls and runs the whole company. It is the most popular type of business. It is not difficult to set up a sole trader business. The advantage of it is that the owner can make quick decisions, and keep a close contact between them and a customer as well as all the profit will go to the owner. The bad thing about being a sole trader is that being a single owner you cannot ask anyone for help with certain decisions and you might have to work extra hours because you are the only person responsible for your business. In case the company gets in debts the owner will be responsible for paying it back and also for the whole company itself so their limited liability may become unlimited. The sole trader put money into their business from their own budget but may also borrow from a bank or friends and relatives.
Partnership can be created by signing a Deed of Partnership- a document that sets out how profits will be shared and the responsibilities and...