Learn: Ownership

Welcome!Today we will learn about Ownership, an important aspect in business studies. Understanding the different types of ownership helps businesses determine their structure, responsibilities, and decision-making processes.

What is Ownership?Ownership refers to the legal structure of a business. It defines who owns the business and how responsibilities, risks, and profits are shared. There are different types of ownership, each with its own advantages and disadvantages.

Sole TraderA sole trader is a business owned and operated by one person. The owner has full control and keeps all profits but is also responsible for all debts (unlimited liability). This type of ownership is common for small businesses, like hairdressers or local shops.

PartnershipA partnership is a business owned by two or more people. Partners share decision-making, profits, and responsibilities. Like sole traders, partnerships usually have unlimited liability unless they are set up as limited liability partnerships (LLPs).

Private Limited Company (Ltd)An Ltd is owned by shareholders, and their liability is limited to the amount they have invested. Shares cannot be sold publicly, and decisions are often made by directors. Examples include small businesses and family-run companies.

Public Limited Company (Plc)A Plc is owned by shareholders, and its shares are traded publicly on the stock market. Like an Ltd, shareholders have limited liability, but the business is usually larger and requires at least £50,000 of share capital.

Not-for-Profit OrganisationsNot-for-profit organisations exist to support a cause or provide services rather than make a profit. They reinvest any surplus into their mission, such as charities or community groups.

Why Ownership MattersChoosing the right type of business ownership is important. It affects decision-making, how profits are shared, and the level of risk involved for owners.

Review Time!Great work! You've learned about the different types of ownership and their features. Let's test your understanding with a few questions.