Business Basics Topic
Forms of Business and Ownership
- Read notes
- Flashcards
- Quiz
- Confident
Study focus - 3 things
- A business can be owned by one person, partners, shareholders, cooperatives, or government
- Ownership affects control, profit sharing, risk, and responsibility
- The thing to remember is that bigger ownership usually means more shared control
Section 1Sole trader
A sole trader is owned and run by one person. The owner keeps the profits but also carries the risks and responsibilities. A small corner shop or hairdresser in Kingston may operate this way.
Section 2Partnership
A partnership is owned by two or more people. Partners can share money, skills, work, and risk. Watch out: disagreements can happen if roles and profit sharing are not clear.
Section 3Company and cooperative
A company is owned by shareholders and has a separate legal identity from its owners. A cooperative is owned and run by members for their shared benefit. Easy to mix up - shareholders invest for returns, while cooperative members usually focus on mutual help.
Section 4Public ownership
Some businesses or services are owned by the government. They may focus on public service as well as money. Examples can include state-owned services or public bodies, depending on the country and time.
Examples
A student sells phone cases alone after school and keeps all profits. Which form of business is this closest to?
A sole trader, because one person owns and controls the business and keeps the profits.
Four farmers pool money to buy equipment and share benefits among members. Which ownership type fits best?
A cooperative fits best because members own and use the business for shared benefit.
Now let's water it
Session runs notes to flashcards to quiz back-to-back.