| what is a sole trader? | business owned and run by one person |
| describe the ownership of a sole trader | owned by one private individual |
| how are sole traders controlled? | controlled by one private individual |
| how are sole traders financed | personal savings
bank loan/grant |
| name 3 advantages of a sole trader | easy to set up
owner keeps all profit
owner makes all decisions |
| name three disadvantages of being a sole trader | unlimited liability
difficult to raise finance
workload can't be shared |
| what is unlimited liability | if business goes into debt, individual owner is responsible for paying it back
personal belongings could be taken in order to pay |
| what is a partnership? | a business owned and run by 2-20 people |
| describe the ownership of a partnership | owned by 2-20 partners |
| describe how partnerships are controlled | controlled by 2-20 partners |
| how are partnerships financed? | by investment of each individual partner |
| by which document is a partnership business set up? | deed of partnership
partnership agreement |
| name three advantages of operating as a partnership | more financed can be raised compared to sole trader
workload can be shared
partners bring expertise to business |
| name four disadvantages of operating as a partnership | unlimited liability
profit is split
possible disagreements
actions of partners are legally binding |
| what is a private limited company? (Ltd) | business owned by 1-50 private shareholders |
| describe the ownership of a private limited company | owned by private shareholders
shares can't be sold on stock market |
| describe how private limited companies are controlled | by board of directors |
| how are private limited companies financed? | share equity invested by share holders |
| give three advantages of private limited companies | limited liability
more finance compared to sole traders and partnerships
easier to obtain additional finance |
| name three disadvantages of a private limited company | financial accounts must be published
complicated and expensive set up compared to sole traders and partnerships
profit is shared by paying dividends |
| what is the public sector? | services and agencies run by the government on our behalf |
| describe the ownership of the public sector | owned by government on our behalf |
| how is public sector controlled | by government at departments at uk, scottish and local levels |
| how is public sector financed | taxes paid by individuals + organisations |
| what are the three levels of government in the UK | uk government
scottish parliament
local government |
| what services do the uk government run | uk wide services and agencies
eg. defence, immigration |
| what laws does uk government make | laws/legislation for all of uk to follow |
| what taxes does UK government collect? | VAT, corporation tax |
| how does scottish parliament run services? | use devolved powers to run services and agencies |
| what taxes does scottish parliament collect? | tax such as income tax |
| what services do local government run? | local services
eg schools, parking and road repairs |
| what activities do local government run? | local activities
eg leisure centres, swimming pools, golf courses |
| what type of taxes do local government collect? | taxes such as council tax + business rates |
| what is a public corporation | business organisation owned by government on our behalf |
| give an example of cutting costs | not funding a new police initiative |
| What is the third sector? | non-profit making organisations that exist to support a cause/aim |
| describe the ownership of a charity | no recognised owner |
| how are charities controlled | board of Trustees |
| how are charities financed | donations
fundraising
grants
charity shop sales |
| who are charities run by? | mostly volunteers + paid employees |
| give two advantages of charities | exempt from paying certain taxes
low wage costs due to mostly using volunteers |
| give two disadvantages of charities | high turnover of volunteers who may leave for paid work
difficult to compete against other charities for donations |
| describe the ownership of clubs and associations | no recognised owner |
| how are clubs and associations controlled | by elected committee |
| how are clubs and associations financed | membership fees
subscriptions paid by members |
| who are clubs and associations run by | locally by volunteers |
| what is a social enterprise? | organisation that trade and earn income and use profit to help their cause |
| what sector of economy are social enterprises part of? | third sector |
| describe the ownership of social enterprises | similar structured to private sector |
| how are social enterprises controlled | sole trader
partners
board of director |
| how are social enterprises financed | grants
private investment
donation |
| how do social enterprises seek to improve society in some way | they have social aims |
| give three advantages of social enterprises | social aims help attract customers
more likely to receive grants due to positive impact on society
easier to attract quality employees who want to support aim |
| give two disadvantages of social enterprises | unpredictable funding due to heavy reliance on grants
difficult to compete against private sector businesses |
| give examples of scottish parliament run services | nhs, police, transport, housing, agriculture |
