U2-1 Legal Structure

jadepalmer98
Mind Map by jadepalmer98, updated more than 1 year ago
jadepalmer98
Created by jadepalmer98 over 6 years ago
57
2

Description

GCSE Business Studies (Unit 2 (Growing a business)) Mind Map on U2-1 Legal Structure, created by jadepalmer98 on 10/20/2013.

Resource summary

U2-1 Legal Structure
1 Sole Trader
1.1 1 person owns and has full liability of the business
1.2 Advantages
1.2.1 Can make all the decisions
1.2.2 Can keep all the profit
1.2.3 Choose own hours
1.2.4 Easy to set up
1.3 Disadvantages
1.3.1 No-one to share ideas with
1.3.2 All worry and risk for self
1.3.3 Unlimited liability
1.3.4 Hard to take holidays/ sick leave
1.3.5 Limited ideas
2 Partnership
2.1 2-20 owners take responsibility
2.2 Advantages
2.2.1 Share decisions and more ideas
2.2.2 Shared risks
2.2.3 Wider skill sets
2.2.3.1 Salesperson, accountant etc
2.2.4 Able to take leave and holidays
2.2.5 More finance available
2.3 Disadvantages
2.3.1 Share profits
2.3.2 Arguments over decisions
2.3.3 If a partner leaves, partnership disbanded
2.3.3.1 Deed of partnership

Annotations:

  • Voluntary document, states working hours, responsibility, profit share etc
3 Private Limited Company (LTD)
3.1 Can sell shares, but only to friends & family
3.2 Advantages
3.2.1 Sell shares - more capital
3.2.2 Owners have more loyalty
3.2.3 Limited liability
3.3 Disadvantages
3.3.1 Raise less capital than a PLC
3.3.2 Shareholders mean you risk losing full control over the direction of the business
3.3.3 Strong possibility of arguments within family
3.3.4 Shareholders want profit on their investments
4 Public Limited Company
4.1 Advantages
4.1.1 Can sell shares to public
4.1.1.1 Raise a lot of capital
4.1.2 Limited liability
4.2 Disadvantages
4.2.1 May be taken over by a shareholder
4.2.2 Shareholders might want short-term returns
4.2.3 Expensive to set up
5 Franchise
5.1 Advantages
5.1.1 Tried and tested brand
5.1.2 Set up using well-known existing brand name
5.2 Disadvantages
5.2.1 Royalties paid to the franchisor
5.2.2 Make few decisions for the business
Show full summary Hide full summary

Similar

Business Studies Unit 1
emily.mckechnie
Business Studies Unit 2
tara.springate
Marketing - Business Studies
me3zer
Unit 1: Business Studies GCSE
Libby Rose
Unit 3 Business Studies
Lauren Thrower
BUSS1
Sophie Davis
The skills needed to be a successful entrepreneur
rhiannafordx
The skills needed to be a successful entrepreneur
Rosie Wallis
AS - Buss1 - Formula Cards
Sophie Davis
1.3.1 Characteristics of Successful Entrepreneurs
Molly Hills
How to Turn Business Failure into Business Success
Micheal Heffernan