Stakeholders Essay

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{draw:frame} INTRODUCTION: AIMS OF BUSINESS OWNERSHIP: The aim of this resource is to develop our understanding of the ownership of business organisations. You should be able to: Identify the main sources of finance for private sector firms. State the basic legal responsibilities of private sector firms. Understanding the meaning of limited liability and unlimited liability. Discuss how the main types of business organisations are set up. Advantages and disadvantages of each form of ownerships. SOLE TRADER: A sole trader is a business that is owned and controlled by one person though they may employ workers, e.g. a newsagent’s shop. Individuals who provide a specialist service like hairdressers, plumbers or existence from their owner. The sole trader receives all profits and is legally required to bear and satisfy all losses personally. The sole trader has unlimited liability to repay amounts owing, or debts, of the business is called the owner equity. The sole trader is free to run the business as he or she thinks the best. Although such a business is inexpensive and easy to set up and run, additional finance may be difficult to obtain. The business name, if different from the owners own name, must be registered. ADVANTAGES: They are usually small businesses, so less money is required to set them up. The owner is in sole charge so quick decisions can be made without having to consult others. The owner gets to keep all of the profits; they don’t have to be shared with others. Financial information can be kept private. The needs of local people can be catered for as can special tastes as the owner will know the local market. DISADVANTAGES: The owner becomes ill or goes on holiday the business may suffer. This can be less of a problem if the sole trader employs a manager

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