Sole Traders Forms of Ownership In this chapter

• Sole Traders Forms of Ownership In this chapter we will look at: • Private Limited Companies • Public Limited Companies • Partnerships • State Owned Companies • Franchises

Sole Traders • The Sole Trader owns and runs their own business. The Sole Trader is the one who makes all decisions and provides the money in their business

The following are the steps involved in setting up a Sole Trader Business 1. Decide what type of business you want to go into- e. g. barbers/ pub 2. Find a suitable premises 3. Register your business with the Register of Businesseshowever if you want to use your own name you do not have to register and can begin trading immediately 4. Apply for a licence if you need one- e. g. for pubs/bookmakers/taxi driver

Sole Trader Advantages Disadvantages • Full Control- Can make all decisions quickly • Keeps all the profit- Don’t have to share with anyone • Can open and close when you like • Easy and cheap to set up- a licence may/may not be needed • UNLIMITED LIABILITY-CAN LOSE YOUR OWN PROPERTY TO PAY DEBTS • The sole trader provides all finance to start the business • The owner makes all big decisions alone-can’t be an expert in everything • Hard to compete with larger businesses

Private Limited Companies • Formed when between 2 and 100 people put together money to start a new business. The people who put money in are called shareholders. • If the company makes a profit, shareholders receive a dividend. The dividend received depends on the amount of shares you invest. 1 share = 1 vote, the more shares, the more votes. • Shareholders have Limited Liability, and the words ltd come after the company name

Private Limited Companies Advantages • LIMITED LIABILITY- ONLY LOSE WHAT YOU PUT INTO THE BUSINES • Can raise money by selling shares • When a shareholder dies the business keeps going • As the company expands it can employ more experts Disadvantages • Profits are shared • More expensive to set up • Many Legal Requirements. Documents to fill in etc. . • The original founders can lose control if bought out

Public Limited Companies • 2+ shareholders to set up • Must follow many laws, rules, regulations- a lot more than Private Limited Companies • Shares cab be bought and sold on the Stock Exchange • Name of the company will end with PLC

Public Limited Companies Advantages • LIMITED LIABILITY- ONLY LOSE WHAT YOU PUT INTO THE BUSINES • Can raise money by selling shares • When a shareholder dies the business keeps going • As the company expands it can employ more experts Disadvantages • Profits are shared • More expensive to set up • Many Legal Requirements. Documents to fill in etc. . • The original founders can lose control if bought out

Partnerships • A partnership is a business where between 2 and 20 people come together to set it up and share control of the business. A set of rules and responsibilities for the company are agreed and written down in a partnership deed • Partnerships are common in types of businesses such as private medical practices and solicitors • The main disadvantage is unlimited liability

Famous Partnerships that worked • http: //visual. ly/8 -famous-business-partnerships-really-worked

Partnerships Advantages • Extra money access in comparison to sole trader • More expertise to make decisions • Financial information is confidential Disadvantages • UNLIMITED LIABILITY • Profits are shared compared with Sole Traders • Decision making can be slow • When a partner leaves, a new deed has to be drawn up

State Owned Companies • Formed by the Dáil and owned by the state with a board of directors appointed to run them • When a government sells a State- Owned company it is called privatisation • If the government takes over a company it is called nationalisation

State Owned Companies

State Owned Companies Advantages Employment. Provide Essential Services Profit-Income for State Keep control over natural resources. -Oil/Gas Provides Essential Services Profit Control over Natural Resources Disadvantages May make a loss Loans May Make a loss Loans

What is Franchising is a business arrangement whereby one person (franchiser) sells the right to use their name, idea or business to others (franchisees) and allows them to set up an exact replica of that business. A franchise is effectively a licence to produce and/or sell another wellknown company’s products and use the company’s name. The franchiser trains and advises the franchises in all aspects of running the business. He also lays down strict rules that all franchisees must obey. The product sold or produced must conform strictly to these conditions laid down by the company granting the licence.