This document discusses different types of business ownership and their associated liabilities. There are two main types: unlimited liability businesses like sole traders and partnerships, where owners are personally liable for all debts and losses; and limited liability businesses called companies, where liability is limited to the amount invested and owners are separate from the business. It also discusses sources of finance for businesses, including retained profits, share capital, bank loans, hire purchase, leasing, trade credit and overdrafts to finance fixed assets and working capital.

1. To be able to distinguish between unlimited liability and limited liability businesses
Private Limited Companies
1. Sole Traders
2. Partnerships
3. Private Limited Companies

2. 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

3. 2 types of business
To be able to distinguish between unlimited liability and limited liability businesses
Unlimited liability
businesses
Limited liability
businesses
- like sole traders
- These are called
companies
If you go bust there is
no limit to what you
can lose
If you go bust what you
lose is limited to what
you put into the business

4. To be able to distinguish between unlimited liability and limited liability businesses
Sole trader - Business and owner
are one

5. To be able to distinguish between unlimited liability and limited liability businesses

6. To be able to distinguish between unlimited liability and limited liability businesses
Company - Business and owner
are separate

7. To be able to distinguish between unlimited liability and limited liability businesses

8. 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?

9. To be able to distinguish between unlimited liability and limited liability businesses
Statement
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.
T or F

10. 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]

11. to be able to describe different sources of finance
Finance for....
Fixed assets
1. Retained profit p.85
2. Share capital p.84
p.85
3. Bank loan
4. Hire purchase p.85
5. Leasing
p.85
Working Capital
[to help cash flow]
p.86
1. Trade credit from
suppliers [creditors]
2. Overdraft from the
bank
p.85
[current liabilities]

12. 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……………….. .

13. 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 …………………..

15. 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….

16. to be able to describe different sources of finance

17. to be able to describe different sources of finance
p.85

18. to be able to describe different sources of finance

19. 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….

20. 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]

21. 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……………….. .

22. to be able to describe different sources of finance