finance and ownership
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To be able to distinguish between unlimited liability and limited liability businesses
Private Limited Companies
1. Sole Traders
2. Partnerships
3. Private Limited Companies
To be able to distinguish between unlimited liability and limited liability businesses
2 types of business
Unlimited liability businesses
- like sole traders and partnerships
Limited liability businesses
- These are called companies
To be able to distinguish between unlimited liability and limited liability businesses
2 types of business
Unlimited liability businesses
- like sole traders
If you go bust there is
no limit to what you
can lose
Limited liability businesses
- These are called companies
If you go bust what you
lose is limited to what
you put into the business
To be able to distinguish between unlimited liability and limited liability businesses
Sole trader - Business and owner are one
To be able to distinguish between unlimited liability and limited liability businesses
To be able to distinguish between unlimited liability and limited liability businesses
Company - Business and owner are separate
To be able to distinguish between unlimited liability and limited liability businesses
To be able to distinguish between unlimited liability and limited liability businesses
Business Ownership
What are the two ways of setting up in business?
Which would you prefer? Why?
To be able to distinguish between unlimited liability and limited liability businesses
Statement T or F
If you are a private limited company you must sell shares to raise money.
The shareholders with the most shares have most control over the business.
Being a shareholder is risky. If the business goes bankrupt, you may lose all your assets.
Limited companies are usually bigger businesses than sole traders.
Finance for....
Fixed assets
1.Retained profit
2.Share capital
3.Bank loan
4.Hire purchase
5.Leasing
Working Capital
[to help cash flow]
1.Trade credit from suppliers [creditors]
2.Overdraft from the bank
[current liabilities]
to be able to describe different sources of finance
Finance for....
Fixed assets
1.Retained profit
2.Share capital
3.Bank loan
4.Hire purchase
5.Leasing
Working Capital
[to help cash flow]
1.Trade credit from suppliers [creditors]
2.Overdraft from the bank
[current liabilities]
to be able to describe different sources of finance
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to be able to describe different sources of finance
Shareholders own the business. They put in money in return for a share in the business. At the end of each year the business hopes to make a profit. One part is kept in the business. This is called r………………. p………………
The rest is paid to shareholders as d……………….. .
The business cannot afford the van. So, the ………..loans the money to ………………….
The business then pays the bank ……………..The bank makes a profit by charging …………………..
Comparing options
Raising capital by borrowing is good because …..
A disadvantage of borrowing is….
Raising capital by selling shares is good because ….
A drawback however is….
to be able to describe different sources of finance
to be able to describe different sources of finance
p.85
to be able to describe different sources of finance
Comparing options
Buying an asset by hire purchase is good because …..
A disadvantage of hire purchase is….
Buying an asset by leasing is good because ….
A drawback however is….
Finance for....
Fixed assets
1.Retained profit
2.Share capital
3.Bank loan
4.Hire purchase
5.Leasing
Working Capital
[to help cash flow]
1.Trade credit from suppliers [creditors]
2.Overdraft from the bank
[current liabilities]
to be able to describe different sources of finance
to be able to describe different sources of finance
Shareholders own the business. They put in money in return for a share in the business. At the end of each year the business hopes to make a profit. One part is kept in the business. This is called r………………. p………………
The rest is paid to shareholders as d……………….. .
to be able to describe different sources of finance
