GCSE Business Studies Unit 1 Introduction To Small Businesses
GCSE Business Studies
• Types of Business
1.4 Making the Start- Up Effective
• To understand the difference between sole
traders, partnerships, franchises, ltd
companies and PLCs.
• To be able to identify benefits and
disadvantages of each
1.2 Making the start-up effective
GCSE Business Studies Unit 1 Introduction To Small Businesses
Lesson Objectives
• Recap what a Sole Trader and a PLC is by
answering the true or false questions
A-10/10 correct
B – 8 – 9 correct
C -6-7 correct
1.2 Making the start-up effective
GCSE Business Studies Unit 1 Introduction To Small Businesses
In your booklets
Public Limited Company (PLC)
Private Limited Company (Ltd)
Partnership
Franchise
Which of these do you already know?
1.2 Making the start-up effective
Types of business
GCSE Business Studies Unit 1 Introduction To Small Businesses
Sole Trader
• Use the internet to research the 5 different
types of business. Fill in the table in your
booklets.
1.2 Making the start-up effective
GCSE Business Studies Unit 1 Introduction To Small Businesses
Task 1:
Sole Trader -Summary
A sole trader (sole proprietor, sole proprietorship or sole owner) is a
business that is owned and run by one person.
Most small businesses are run as sole traders.
Sole traders have unlimited liability.
They are in complete control of their business,
and take all of the profits
They usually use personal savings to start their
business, although bank loans and overdrafts
are often used too.
Partnership - Summary
A partnership is a bit like two or more sole traders trading together. A
partnership is owned and controlled jointly by the partners.
Partnerships suit the professions such as
doctors, lawyers, accountants and architects.
However partnership can exist in any line of
work, e.g. a painter and decorator may become
partners.
Partnerships generally have unlimited liability, although
liability is shared between the total number of partners
therefore it is less risky than being a sole trader.
Finance is usually raised through personal savings and bank loans, just like
Sole Traders. Partners split profits depending on their own share agreements.
Private Limited Company
The ‘private’ in ‘private limited company’ means that the shares can
only be sold privately – they cannot be offered for sale to the general
public. All the shareholders must agree to the sale.
Often the shareholders are all members of
the same family.
Private limited companies have Ltd. or
Limited after their name.
Private limited companies are generally smaller than plc’s. They have
more control over the fate of the company since they control the sale
of the shares.
Public Limited Company
The ‘public’ in ‘public limited company’ means that the public can
buy shares in the company if they are offered for sale.
Companies usually become a plc due to
major growth. Becoming a plc brings a lot
of capital into the business which allows
further growth.
Shares are traded on the stock market,
where anyone can buy them at the
current market price.
Shares can go up and down in value based
on company performance, economic
factors or world events
Public limited companies have plc after their name.
Franchise
Franchising is essentially the 'hiring out' or licensing of the use of
'good ideas' to other companies.
Companies like McDonalds, Specsavers
and Starbucks are all franchises.
A franchise has limited liability.
The franchisee pays a start up fee to use
the name, business plan, materials etc of
the franchisor.
The franchisee then must make regular
payments, usually based on a percentage
of the profits.
Public limited companies have plc after their name.
Over to you
A – 14 to 15 marks
B – 12 to 13 marks
C – 9 to 11 marks
Answer the exam style
questions in your books.