Forms of Business

Forms of a Business…
1. Define the term ‘sole trader’
2. List some examples of ‘sole traders’
3. Outline the advantages and disadvantages of sole traders
1. Sole Trader
2. Unlimited Liability
Main types of organisations –
Key Words
Private
Sole trader Partnership limited
company

Not-for-
Franchise Co-operative profit
organisation
 Activity
Before we look at the different types of business organisation, consider the following
statements and write down whether you agree or disagree with each one.
1. A sole trader shares his or her profits with the other owners of the business.
2. The maximum number of partners you can have in a partnership is 20.
3. If you own a limited liability company and the business loses money, you must repay
the money out of your private funds.
4. A franchise is where the owner of a successful business pays others to open
branches of the business in another town or city.
5. Each member of a co-operative has one vote no matter how much they have invested
in the business.
6. Concern is an example of a not-for-profit organisation
 Define the term ‘sole trader’
List examples…
 Sole Trader
A sole trader is a person who owns and runs his or her own business.

Newsagent Carpenter Butcher Farmer

Sole Trader – Advantages and
Disadvantages
1. Define the term ‘sole trader’
2. List some examples of ‘sole traders’
3. Outline the advantages and disadvantages of ‘sole traders’
1. Define the term ‘entrepreneur’
2. List some examples of ‘entrepreneurs’
3. Outline the challenges faced by entrepreneurs when starting their own
business
4. Explain the difference between a ‘skill’ and a ‘characteristic’?
5. List the skills/ characteristics associated with entrepreneurs
6. Define the term ‘sole trader’
7. List some examples of ‘sole traders’
8. Outline the advantages and disadvantages of ‘sole traders’
1. List the steps involved in setting up as a ‘sole trader’
2. Explain the term ‘unlimited liability’
3. Define the term ‘partnership’
4. Outline the advantages and disadvantages of partnerships’
One Note:
Tab: Enterprise
Page: Exam Questions
Title: ‘Homework 02.03.22’
1. Sole Trader
2. Unlimited Liability
3. Partnership
1.List the steps involved in setting
up as a ‘sole trader’
How to Set Up as a Sole Trader
Decide what area of business you want to go into, for example opening a newsagent or setting up a
landscape gardening business.

Find suitable premises. These should be close to a well-populated area.

Decorate and fit out the premises with furniture, equipment and stock.

Register your business name with the Companies Registration Office (CRO), for example Grange Stores.
However, if you intend to use your own name, for example Teresa Doyle, you do not need to register the
name and can begin trading immediately.

Apply for a licence if you need one. A licence is necessary if you want to operate as a taxi driver or a
bookmaker or if you want to open a pub or start a radio station.
Sole Trader – Unlimited Liability
•Unlimited liability means that a sole trader is
responsible for all the debts of the business.
•The sole trader must repay all his or her debts, even
if this means selling their business to do so.
•If this is not enough, the sole trader must use their
private possessions, such as their house, car and
private savings, to raise money to pay off the
remaining debts.
 Define the term ‘partnership’
List examples…
Partnership
A partnership is formed when between two and 20 people carry on a business
together with a view to making a profit.

Doctor Dentist Accountant

 Class Discussion
1. Outline the advantages and disadvantages of partnerships’
Partnership – Advantages and
Disadvantages
1. List the steps involved in setting up as a ‘sole trader’
2. Explain the term ‘unlimited liability’
3. Define the term ‘partnership’
4. Outline the advantages and disadvantages of partnerships’
How to Set Up a Partnership

A written agreement about

The partnership name should
how the partnership will
be registered with the
operate should be drawn up.
Companies Registration Offic
This is called a deed of
e (CRO).
partnership
Private Limited Company
•A private limited company is formed when between one and 149 people start a new
business together with limited liability.
•The people who put money into the new company are called shareholders because
they each buy a share of the new business. The money they invest is called capital.

Vodafone Microsoft Eason

Limited Liability
Means that if a private limited company goes bankrupt, the owners will lose only the
amount they invested in the company. Their private possessions, for example their
home or savings, cannot be used to pay off these debts
Private Limited Company –
Advantages & Disadvantages
 How to Set Up a Private Limited
Company

Complete the necessary

Elect a board of directors and Receive a Certificate of
documentation and register
appoint a managing director to Incorporation from the
the company with the
run the company on a day-to- Companies Registration Office
Companies Registration Office
day basis. and begin trading.
(CRO).
Franchise
A franchise is an arrangement where one person is given permission to set up a
branch of another person’s business in return for a fee or a percentage of their
sales.

Costa
McDonalds Subway
Coffee
Franchise Terms

Franchiser Franchisee

• The original owner of • The new organisation

the business that takes on the
franchise agreement.
Franchise – Advantages and
Disadvantages
Co-operative
A co-operative is an organisation formed by people with a common interest who join
together to achieve a particular objective that they could not achieve on their own.

Credit Unions Kerrygold

owned by Ornua
Characteristics of Co-operatives
Co-operatives must register with the Registrar of Friendly Societies, which is part of the Companies Registration
Office (CRO).

There must be a minimum of seven members.

Each member has an equal voice in decision-making – one member, one vote.

The members of a co-operative have limited liability.

Co-operatives can be identified by the word ‘Society’ in their name.

Types of Co-operatives
•Dairy, such as the Tipperary Co-operative Creamery Ltd
•Livestock, such as Athenry Co-operative Livestock Mart Ltd
•Store, trade and wholesale, such as Roscommon Retail Therapy Society Ltd
•Service-related co-ops, such as Blackstairs Group Water Scheme Society Ltd
•Community-oriented, culture and leisure co-ops, such as North Kerry Arts, Culture
& Heritage Society Ltd
•Food, fishing and beverage co-ops, such as Southeast Shellfish Co-operative Ltd
•Advisory and education-related co-ops, such as the Roscrea Community & Tourism
Leisure Centre Co-op.
Co-operative – Advantages and
Disadvantages
Not-for-Profit Organisation
is set up to provide an essential or charitable service in some area of life.

Charities Schools Hospitals