Do now – Page 90 Mo Bro’s and discussion purple box

The options for start ups

• Recall the different ownership types• Explain the advantages and disadvantages of different ownership types• Evaluate ownership types

What does liable mean?

Liability

e.g. Kelly’s Sandwich shop

UNLIMITED

Limited liability e.g.

• E.g. If Miran owns 10 Tesco shares for £100... and tomorrow Tesco goes bankrupt, he will only lose the £100 he put in.

So what types of start up options are there?

Main types of ownership

Sole trader• A sole trader owns and runs their own

business

Sole trader...Advantages• Keeps all the profit• Owner has complete control• Easy and quick to set up

Disadvantages• Won’t benefit from

economies of scale• Owner likely to work long

hours• Lenders may be reluctant to

give them finance as it’s risky

• UNLIMITED LIABILITY

Partnership• is usually owned by 2-20 people

Partnership...Advantages• Quick and easy to set up• Partners can bring different

skills/expertise to the business

• More owners can raise more capital

Disadvantages• Have to share profits• Disagreements• UNLIMITED LIABILITY

Question and answer (4 mins)

Peer assess

Private limited companies• Can sell shares privately, to friends and family• Name ends in LTD

LTDAdvantages• LIMITED LIABILITY• Can sell shares to raise

capital

Disadvantages• Have to publish all financial

information• Takes time to set up• Profits have to be shared

between shareholders

QuestionsGlue in

(20 mins)

Plenary – Focus circle