Information about sole traders

Table of Content

Private data – Information about sole traders is kept private, unlike that of limited companies which is secretaries made public after registration with Companies House. C] Specialist – Often a small business, sole traders can offer a more personal service with local roots and ties. This can be more appealing to potential customers in the local community. D Personal – Because there is no need to confer with other decision makers, sole traders can make decisions quickly and act on them swiftly, providing for the needs of their customers. See more at: Disadvantage 0 Liability – sole traders are not seen as a separate entity by the law. Therefore, they are subject to unlimited liability. This means if the business gets into debt, the business owner is liable. In the worst case, this may mean a person risks their home, personal savings and any other assets they have both in and outside of the business. O Finance – sole traders often find it difficult to raise finance to fund their business. They may struggle with expansion in the future.

Reverse economies of scale – sole traders will be unable to take advantage of economies of scale in the same way as limited companies and larger corporations, who can afford to buy in bulk. This might mean that they have to charge higher prices or their products or services in order to cover the costs. O Decision making – all decisions must be made by the sole trader. There is no room for help by others. So the success or failure of the business rests on one person – See more at: http://blob. Discourteousness. Co. WE/05/24/advantages-and -disadvantages-of-a-sole-trader/#stash. GHz Elfin. Duff Partnership For a business to be called a partnership you will need two or more person who join to carry on a trade or business, for it to become a fair partnership each person while contribute money, property,labor or skills and they are expected to hare the profits or losses furthermore in some business some partners don’t hold the same shares, so may they own 60% of the company on the other hand the other partner owns 40 this is mainly due to who invested the most money.

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Advantages of Partnership * Capital – Due to the nature of the business, the partners will fund the business with start up capital. This means that the more partners there are, the more money they can put into the business, which will allow better flexibility and more potential for growth. It also means more potential profit, which will be equally shared between the partners. Flexibility – A partnership is generally easier to form, manage and run.

They are less strictly regulated than companies, in terms of the laws governing the formation and because the partners have the only say in the way the business is run (without interference by shareholders) they are far more flexible in terms of management, as long as all the partners * Shared Responsibility – Partners can share the responsibility can agree. Of the running of the business. This will allow them to make the most of their abilities. Rather than splitting the management and taking an equal share of ACH business task, they might well split the work according to their skills.

So if one partner is good with figures, they might deal with the book keeping and accounts, while the other partner might have a flare for sales and therefore be the main sales person for the business. * Decision Making – Partners share the decision making and can help each other out when they need to. More partners means more brains that can be picked for business ideas and for the solving of problems that the business encounters. Disadvantages of Partnership * Disagreements – One of the most obvious disadvantages of partnership s the danger of disagreements between the partners.

Obviously people are likely to have different ideas on how the business should be run, who should be doing what and what the best interests of the business are. This can lead to disagreements and disputes which might not only harm the business, but also the relationship of those involved. This is why it is always advisable to draft a deed of partnership during the formation period to ensure that everyone is aware of what procedures will be in place in case of disagreement and what will happen if the partnership is dissolved. Agreement – Because the partnership s jointly run, it is necessary that all the partners agree with things that are being done. This means that in some circumstances there are less freedoms with regards to the management of the business. Especially compared to sole traders. However, there is still more flexibility than with limited companies where the directors must bow to the will of the members (shareholders). * Liability Ordinary Partnerships are subject to unlimited liability, which means that each of the partners shares the liability and financial risks of the business.

Which can be off putting for some people. This can be countered by the formation of a limited ability partnership, which benefits from the advantages of limited liability granted to limited companies, while still taking advantage of the flexibility of the partnership model. * Taxation – One of the major disadvantages of partnership, taxation laws mean that partners must pay tax in the same way as sole traders, each submitting a Self Assessment tax return each year. They are also required to register as self employed with HEM Revenue ; Customs.

The current laws mean that if the partnership (and the partners) bring in more than a certain level, then they are subject to greater levels of personal taxation than they old be in a limited company. This means that in most cases setting up a limited company would be more beneficial as the taxation laws are more favorable (see our article on the Advantages and Disadvantages of a Limited * Profit Sharing – Partners share the profits equally. This can lead to Company). Inconsistency where one or more partners aren’t putting a fair share of effort into the running or management of the business, but still reaping the rewards. – See more at: http://blob. Discourteousness. Co. uW2010/03/01/advantages-and -disadvantages-of-partnership/#stash. Orbited. Duff Public limited company A public limited company is a company that is able to offer its shares to the public however they don’t have to offer there shares to the public but they can. Furthermore 95% limited companies in the UK are private. Advantages Limited liability – by far the most important advantage of incorporation.

Limited liability protects the personal wealth of the shareholders Easier to raise finance – both through the sale of shares and also easier to raise debt Stable form of structure – business continues to exist even when shareholders change Provides more privacy of information than an public limited company Disadvantages Greater admit costs (though much cheaper than being a public company) Public disclosure of company information (annual report ; accounts + annual return) Directors’ legal duties (set out by Companies Act) http://www. Tour. Net/blob/index. PH/business-studies/comments/sq -what-are-the-main-advantages-and-disadvantages-of-being-a-private-limited franchise what is a franchise? A franchise gives you the right call your business an individual group to market AAA company goods or services. So a good example of this would be, McDonald’s, subway domino’s pizza etc. There are many different types of franchises. Many people associate only fast food businesses with franchising.

In fact, there are over 120 different types of franchise businesses available today, including automotive, cleaning & maintenance, health & fitness, financial services, and pet-related franchises, just to name a few. Http://franchises. About. Com/odd/franchiser’s/a/what-franchises. HTML Primary, secondary and tertiary Primary research Primary research is where you collect new data or new information what has not been collected before. When you’re looking for primary research there is no existing data available for the researcher.

This means that the researcher needs to design questionnaires, collect data from respondents and then analyses the result. Primary research is more time consuming and may cost you a lot of money. A major advantage is that if you’re going to bring a new product to the market you can back your facts up with the primary research. The results gathered will be more relevant to the needs of the client. Secondary research is collecting old data, data that could help you in your project unlike primary research, where you would have to start from scratch.

Secondary research is already there for you. These secondary sources could include previous research reports, newspapers, magazines, journal content, and government. Secondary research is also known as (desk research) and could include research from subjects and experiments. Quantitative Quantitative data is based on facts what has figures to back you up. The term quantitative data is used to describe a type of information that can be counted or expressed numerically http://psychology. About. Com/odd/cinder/g/quant_data . Tm A good example of quantitative data is “there were 46 students at the lecture room today” Qualitative Qualitative data is based on your opinions rather than factual data such as initiative data. Qualitative data is what the mind thinks it not right it’s not wrong it’s your opinion. A good example of qualitative data is “the hotel quality was very poor it didn’t reach to standards “that’s his opinion but that’s not a fact, someone else could have stayed in the same hotel and had a different outcome. Difference between qualitative and quantitative Some methods provide data which are quantitative and some methods data which are qualitative.

Quantitative methods are those which focus on numbers and frequencies rather than on meaning and experience. Quantitative methods (e. G. Experiments, questionnaires and psychometric tests) provide information which is easy to analyses statistically and fairly reliable. Quantitative methods are associated with the scientific and experimental approach and are criticized for not providing an in depth description. Qualitative methods are ways of collecting data which are concerned with describing meaning, rather than with drawing statistical inferences.

What qualitative methods (e. G. Case studies and interviews) lose on reliability they gain in terms of validity? They provide a more in depth and rich description. Quantitative methods have come under considerable criticism. In modern research, most psychologists tend to adopt a combination of qualitative and quantitative approaches, which allow statistically reliable information obtained from numerical measurement to be backed up by and enriched by information about the research participants’ explanations. Http://u k. Answers. Yahoo. Com/question/index? Id=20090729025011 Jammed Describe the extent to which an organization meets the objectives of different stakeholders what is an aim A aim is important to every business, it’s a broad statement of desired outcomes Specific – clear and easy to understand. Measurable – i. E. Able to be quantified. Achievable – possible to be attained. Realistic – not ‘pie in the sky’. Time bound – associated with a specific time period. Objective A specific result that a person or system aims to achieve within a time frame and with available resources. In general, objectives are more specific and easier to measure than goals.

Objectives are basic tools that underlie all planning and straightjacket’s. They serve as the basis for creating policy and evaluating performance. Read more: http://www. Objectifications. Com/definition/objective. HTML#ixzz2WV5eeOaF Market share Market share is one of the primary indicators companies use to measure owe well they are doing versus competitors. Market share is the percentage of business or sales a company wields out of total business or sales by all competitors combined in any given market. The total available business is called market potential.

There are two basic ways of stating market share figures, though actual calculations may be difficult to derive. There are both advantages and disadvantages to having a large market share relative to competitors’ http://smelliness’s. Chronic. Com/market-share-10349. HTML Return on capital employed A ratio that indicates the efficiency and profitability of a company’s capital investments, this is calculated by using the earnings before interest and taxes and dividing it by total assets minus current liabilities this would give you the return on capital employed.

Customer satisfaction Customer satisfaction refers to the extent to which customers are happy with the products and services provided by a business. Customer satisfaction levels can be measured using survey techniques and questionnaires. Gaining high levels of customer satisfaction is very important to a business because satisfied customers are most likely to be loyal and to make repeat orders and to use a did range of services offered by a business Read more: http://fastidiousness’s. Co. UK/business-theory/operations ‘customer-satisfaction. HTML#ixzz2WmEPtG90 Follow us: @Ethnicities on Twitter I timeless Studiousness on Backbone 4. 1. Discuss the significance of International Trade to UK business organization International Trade is the exchange of goods and services along International borders. (hypersensitivities. Com). International Trade is significance to the UK business also its economy as it helps UK to keep expanding its economic growth as well as to gain competitiveness in global economy. The United Kingdom’s economy depends on foreign trade.

Its government favor free and unrestricted trade and has championed International Trade organization such as World Trade Organizations (WTFO) and European Union (E). International Trade is one of the important sources of revenue for UK. Moreover, International Trade provides UK organizations with overseas market opportunities for its products. Through International Trade I-J businesses organizations are able to advertise their products abroad, participate in International Trade exhibitions also can bring special key contacts to the United Kingdom.

Additional, United Kingdom is a small country and hence has limited market for its products, thus in order for economy to grow, International Trade is essential as it helps to gain extra consumers from foreign countries To summaries, International Trade is important to UK business organizations as it provide border cross market opportunities, allows UK businesses to expand their extending sales, provide potential of existing products which allows UK business organizations to gain global market share. International Trade allows the movement of human capital labor. 4. 2. Analyses the impact of global factors on UK organizations

UK organizations decisions relates to accessing international markets by finding new markets or exporting its existing products to other countries, its ability to compete in international markets, the impact on decision making on its existing trading blocs. International markets: UK organizations have grown international though expansion of business size as well as external growth. Further, UK business have acquires i. E. Merges and takeovers firms from foreign countries. Many multinational firms have been allowed to operate in UK as well as UK organizations operate overseas to bring market competition.

Impacts of global factors to UK organizations can be analyses under PEST heading, i. E. Political, Economic, Social and Technological factors. Political Factors Political changes such as countries administration change through coup, war, terrorism, violence, change in government through democratic elections, can influence future decision making for UK business organization, e. G. Current opportunities to trade with Russia and eastern European countries. Another is political uncertainty in countries such as Sudan, Somali, Syria etc. Results to fall in investment by UK business organizations and effect on business expanding. Also political policy impacts the ease with how business is conducted. Economic Factors This factor relate to the way business organizations pays tax, investment consideration, Financial Markets such as capital movements and capital raise, commodity prices, such as oil, energy etc. Moreover UK business organizations trade abroad complies with Monetary and Fiscal policies on interest rates, tax regimes government aid, exchange rate due to different currencies such as Euro and Dollars.

Social Factors Local environment affects business organizations as well as human communities. The widespread of ecological damage result large costs on easiness organizations in legal costs and compensation payments and environment. UK business organizations have to considering culture differences and avoid religious offences, for example selling condoms to catholic countries, selling alcohol to Muslim countries. For example there are supermarkets and butchers that sell hall meat for Muslim customers and banks provides special bank services for Muslim customers.

Technological Factor Technology improves often therefore it has big impact on UK business organizations. Many International businesses use chip and pin instead of signing when making payments. Online business allows business to trade and payment made direct online. Businesses are forced to have compatibility technology in management such as accounting systems also language different, etc. 4. 3. Evaluate the impacts of policies of the European Union on UK business organizations European Union is a group of different countries which their governments work together.

All members have to agree to the rules also policies, whereas in return get certain benefits. To join the union each country must pay money mostly through taxes. The Key European Union policies are monetary union, i. E. The use of single runners – the Euro, free trade, common commercial policy, European Join competition law, and common agriculture policy. Although United Kingdom is a member of the European Union, it does not use the single currency, the Euro. This means UK organizations have to change British sterling pounds to Euro in order to trade with other E members that use the single current.

The exchange rate is fixed under monetary and fiscal policy and keep changing depend on inflation. European Union is a trade bloc, thus no quotas or tariffs for UK business organizations exporting goods and services inside the E members. But the E isolation has made it easy foe UK firms to trade to it members. The common commercial policy are followed by all EX. business include UK business organizations for the purpose of protecting E businesses to use thing such as tariffs, subsides and quotas on imports from outside E participants members.

The competition law grants UK business organizations opportunities to trade across the European Union. UK big firms organizations as other EX. big firms are prevented to use their power to set up cartels and trade in monopoly market. Moreover, the single market means citizens of UK and E are free to move, duty, live, and trade anywhere within the European Union members. The common fisheries policy forces E members include UK fishing organizations to stick to rules on fishing as agreed. Thus UK fishing firms are only permitted to fish for certain categories of fish at certain times of the year to protect stocks. Www. BBC. Co. Unstable) Common Agriculture Policy (CAP) Common Agriculture Policy was introduced for the purpose of increasing agriculture productivity as well as to ensure a fair trade of living for agricultural producers, to stabilize markets, assure availability of supplies and ensure reasonable prices to consumers. Generally E agricultural products prices are very high. Common Agriculture Policy comprises different types of prices. A target prices is set with consideration that farmers will be able to get in the open market.

A threshold price is set for imports raised when world prices are lower than EX. prices. A guarantee price is the price that the Commission will take surplus products off the market by stepping in and buying it up. According to the policy, 90 per cent of EX. produce is protected, and 70 per cent in receipt of support prices. However, there are some criticisms for CAP for its big budget and for purporting inefficient agricultural practices that result the policy to be reformed in 1990. Another reform has been proposed by European Commission October 2011 which is due to take place.

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