ILO
a) Sole trader, partnership and private limited company
b) Franchising, social enterprise, lifestyle businesses, online
businesses
c) Growth to PLC and stock market flotation
a) Sole trader, partnership and private limited company
b) Franchising, social enterprise, lifestyle businesses, online
businesses
c) Growth to PLC and stock market flotation
Sole trader
According to the latest statistics, based on data collected at the start of 2014, there are around 5.2m businesses currently operating in the UK.
These businesses employ over 25.2 million people, and turn over an estimated £3.5 trillion. A massive 99.3% of all enterprises are defined as ‘small’ (i.e. they employ less than 50 people), and these businesses employ over 12m people. Significantly, 76% of all the businesses in the UK have no employees at all – an increase of 2% on the previous year. There were around 3.3 million sole proprietorships in the UK at the start of 2014, 457,000 partnerships, and 1.5 million actively trading limited companies (the total number of limited companies is over twice this number). http://www.companybug.com/how-many-limited-companies-are-there-in-the-uk |
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A one-person business with unlimited liability for the debts of that business.
As a sole trader, you run your own business as an individual. You can keep all your business’s profits after you’ve paid tax on them. You can employ staff. ‘Sole trader’ means you’re responsible for the business, not that you have to work alone. You’re personally responsible for any losses your business makes. This is known as unlimited liability. |
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Partnership
A partnership is formed when two or more people set up in business together - This is under the 1890 Partnership Act.
When a partnership is set up, it is advisable to write a legal document called a Deed of Partnership. This is an agreement that sets out the rules of the partnership, such as how profits are divided and how it will be valued if somebody wants to leave.
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Private Limited Company
A business that is owned by its shareholders, run by directors and where the liability of shareholders for the debts of the company is limited.
A limited company is an organisation that you can set up to run your business - it’s responsible in its own right for everything it does and its finances are separate to your personal finances.
Any profit it makes is owned by the company, after it pays Corporation Tax. The company can then share its profits. Ownership Every limited company has ‘members’ - the people or organisations who own shares in the company. Directors are responsible for running the company. Directors often own shares, but they don’t have to. |
Legal responsibilities
There are many legal responsibilities involved with being a director and running a limited company. How to set up a limited company You must register the company with Companies House and let HM Revenue and Customs (HMRC) know when the company starts business activities. Tax responsibilities Every financial year, the company must:
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Public Limited Company
A company that is able to offer its shares to the public.
Well over 95% of limited companies in the UK are “private” – it is by far the most common form of limited company.
A public limited company ('PLC') is a company that is able to offer its shares to the public. They don’t have to offer those shares to the public, but they can.
There are some specific requirements for a PLC which must be met:
A public limited company ('PLC') is a company that is able to offer its shares to the public. They don’t have to offer those shares to the public, but they can.
There are some specific requirements for a PLC which must be met:
- The minimum number of shareholders must be two (a private limited company only needs one shareholder)
- Accounts must be filed within 6 months of the year end (the limit is 9 months for a private company)
- The Company Secretary must be a qualified person (in a private company the secretary does not need to be qualified)
- The minimum number of Directors is two (just one needed for a private company)
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b) Franchising, social enterprise, lifestyle businesses, online
businesses
Franchising
Where a small business owner buys the rights to sell the goods and services of a large, well-established company.
Franchisee; This is the small business owner who is buying the rights. Franchisor; this is the large business who are selling the rights e.g. Subway Why would a business want to franchise?
How would it benefit them? Drawbacks? Why would someone want to own a franchise? How would it benefit them? Drawbacks? |
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Social Enterprise
A social enterprise is a business that trades for a social and/or environmental purpose.
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What is a social enterprise?
Why is it set up as a business rather than a charity? |