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    Business Ownership Lesson 2

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    Aghaanaa Jaiganesh
    1. The document discusses different legal structures that businesses can adopt, including sole trader, partnership, limited liability, and limited liability partnership structures. 2. It aims to help students understand the benefits and drawbacks of each structure, such as their management and control, sources of finance, and liability. 3. Key aspects covered include the differences between limited and unlimited liability, what constitutes a deed of partnership, and the advantages and disadvantages of partnership structures.

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    Business Ownership Lesson 2

    Uploaded by

    Aghaanaa Jaiganesh
    28 views17 pages
    1. The document discusses different legal structures that businesses can adopt, including sole trader, partnership, limited liability, and limited liability partnership structures. 2. It aims to help students understand the benefits and drawbacks of each structure, such as their management and control, sources of finance, and liability. 3. Key aspects covered include the differences between limited and unlimited liability, what constitutes a deed of partnership, and the advantages and disadvantages of partnership structures.

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    1. The document discusses different legal structures that businesses can adopt, including sole trader, partnership, limited liability, and limited liability partnership structures. 2. It aims to help students understand the benefits and drawbacks of each structure, such as their management and control, sources of finance, and liability. 3. Key aspects covered include the differences between limited and unlimited liability, what constitutes a deed of partnership, and the advantages and disadvantages of partnership structures.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    28 views17 pages

    Business Ownership Lesson 2

    Uploaded by

    Aghaanaa Jaiganesh
    1. The document discusses different legal structures that businesses can adopt, including sole trader, partnership, limited liability, and limited liability partnership structures. 2. It aims to help students understand the benefits and drawbacks of each structure, such as their management and control, sources of finance, and liability. 3. Key aspects covered include the differences between limited and unlimited liability, what constitutes a deed of partnership, and the advantages and disadvantages of partnership structures.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 17

    Business Ownership

    Lesson Objectives
    Students should be able to:
    1.Understand the different legal structures that businesses
    adopt

    2. Analyse the benefits and drawbacks of each legal


    structure
    (including issues such as management and control, sources
    of
    finance available, liability and distribution of profits)
     What is the difference between Limited Liability
    and Unlimited Liability

    Slide 2
    Business Ownership

    Sole Trader
    Business Ownership
    • Sole Trader:

    A Business Owned, financed and controlled by


    one individual but can employ other staff
    Business Ownership
    Business Ownership
    Business Ownership
    Business Ownership

    Partnership
    Business Ownership
    Partnerships:
    • Business owned, financed and controlled by 2 or more
    partners up to 20 partners.
    • Terms of Partnership agreed through contract – Deed of
    Partnership.
    Examples.
    • Common in professions – lawyers, accountants,
    architects, estate agents, vets, etc.
    Slide 10
     A deed of partnership can be defined as:

    “An agreed legal document that


    outlines the rules by which a
    partnership will be run”

     It would usually outline:


     Who the partners are
     How much each partner has invested
     How profit should be shared
     How major decisions will be made
     The process when a partner leaves or joins

    Slide 11
     A limited partnership is one where at least one partner does not play
    an active role in the business
     They are sometimes referred to as “Sleeping Partners”

    li mit ed p a rtner has


    A d liability,
    t o f li m i te
    the safety ne a r y p artners
    unlike o r d i n

    s t h at th e ir personal
    This mean n ot at risk
    s si o n s a r e
    posse

    Slide 12
     The Limited Liability Partnership Act 2000 introduced a new type of
    partnership
     Known as “Limited Liability Partnerships” (LLPs)

     LLPs are a mix of partnership and Private Limited Company (LTD)


     This means they have 3 key differences compared to an ordinary partnership:

    The business is The partners have The business must


    limited liability, so submit copies of
    incorporated, which
    their personal their accounts to
    means that it has its
    possessions are not at the Registrar of
    own legal identity
    risk should the Companies
    business fail

    Slide 13
    Business Ownership

    Partnerships: Advantages

    • Greater access to capital


    • Shared responsibility
    • Greater opportunity for specialisation
    • Easy to set up
    Business Ownership
    Business Ownership
    Partnerships: Disadvantages

    • Unlimited Liability
    (However since 2001, Partnerships can apply to
    be Limited Partnerships)
    • All partners liable for the debts of the others
    • Partnership dissolved on death of one partner
    • Potential for conflict
    • Decisions of one partner binding on the rest
    • Limited access to capital
    Business Ownership

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