business start up

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Author:
murphyainec
ID:
109632
Filename:
business start up
Updated:
2011-10-17 15:39:18
Tags:
business
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Description:
chapter 15
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  1. what choices does an entrepreneur make when setting up a business?
    • 1. organisational options
    • 2. production options
    • 3. financial options
  2. what are the three organisational options?
    • 1. sole trader
    • 2. partnership
    • 3. private limited company
  3. what is a sole trader
    person who sets up, owns and runs their own business e.g. hairdresser
  4. what are the advantages of a sole trader?
    • 1. easy to set up... no government permission needed.. few legal registration requirements
    • 2. keep all the profits... great motivation
    • 3. confidential.. do not have to publish final accounts
    • 4. full control.. makes all the decisions
  5. what are the disadvantages of a sole trader?
    • 1. unlimited liabiltiy
    • 2. difficult to run a business alone.. no one to help
    • 3. hard to raise money.. cannot sell shares and hard to get loans
    • 4. results in long hours and lots of stress
  6. what is a partnership?
    business owned by and managed by between 2 and 20 owners called partners... pool their resources and talents to make a profit e.g. doctors
  7. what are the advantages of a partnership?
    • 1. easy to set up... no government persmission.. few legal registration requirements.. deed of partnership
    • 2. more capital
    • 3. better decisions
    • 4. confidential
  8. what are the disadvantages of a partnership?
    • 1. unlimited liability
    • 2. profits have to be shared
    • 3. disputes may arise
    • 4. slower decision making
  9. what is a private limited company?
    business set up by between one and 50 shareholders... ltd.. one owner must have two directors.. separate legal identity e.g. Pony Tales Stables Ltd
  10. advantages of a private limited company?
    • 1. limited liabiltiy
    • 2. easier to raise capital
    • 3. more knowledge, skills, experience... better decisions
    • 4. pay less tax.. corporation tax
    • 5. continuity of existance
  11. disadvantages of a private limited company?
    • 1. complicated to set up.. memorandum of association... articles of association.. form A1.. certificate of incorporation
    • 2. must publish final accounts
    • 3. profits have to be shared
    • 4. a lot of legal requirements.. financial a/c must be audited annualy
  12. what are the three production options?
    • 1. job production
    • 2. batch production
    • 3. mass production

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