Learn: Business Ownership

Welcome!Building on what you've already learned about the purpose and nature of businesses, today we'll explore business ownership. This will help you understand how different types of businesses are structured and operated.

What is Business Ownership?Business ownership refers to the legal structure of a business and who has control over it. Each type of ownership has different levels of responsibility, liability, and benefits. Choosing the right type is important for running a successful business.

Sole TraderA sole trader is a business owned and run by one person. The owner has complete control and keeps all the profits, but they also have unlimited liability (they are personally responsible for any business debts). This is a common structure for small businesses like plumbers or hairdressers.

PartnershipA partnership is owned by two or more people who share control, profits, and decision-making. Partnerships can have unlimited liability unless they are set up as a Limited Liability Partnership (LLP). Examples include law firms or accountancy practices.

Private Limited Company (Ltd)A private limited company is owned by shareholders but the shares are not sold publicly on the stock market. Shareholders have limited liability, meaning they are only responsible for the money they invest in the business. This structure is often used by family businesses or small companies.

Public Limited Company (Plc)A public limited company sells shares on the stock market, allowing many people to invest in the business. Like private limited companies, shareholders have limited liability. Plcs are often large businesses, such as supermarkets or airlines.

Not-for-Profit OrganisationsNot-for-profit organisations exist to benefit society rather than make profits. Examples include charities or social enterprises. They may reinvest any surplus into their activities instead of distributing profits to owners.

Review Time!Great work! You've learned about different types of business ownership, including sole traders, partnerships, Ltds, Plcs, and not-for-profit organisations. Now let’s test your understanding with a few questions.