Btec Level 3 in Business, Unit 1 the Business Environment

| A sole proprietorship is easy to create; there is minimal creation cost and time.The single owner has autonomy in decision making; sole owner makes all decisions related to the business and has complete ownership of business’s finances.

| The customers would be influenced because if the company are financially struggling the customers are there only hope to stay profiting. If the company was to go bust it means customers will no longer be able to shop there. The customers would be an external stakeholder, they can get information by advertisements and even check their annual report on the businesses website.

Sole trader is where a business is run as an individual; so that all profits are their own after tax has been paid on them. Within a sole trader organisation it is possible to employ staff, as the sole trader only means that you own the business personally and do not actually have to work by yourself.

with their return on investment, employees are paid and treated fairly, and customers are satisfied with the

Profit retention- The general partners share profit and losses equally. The limited partner(s) will receive a amount of profit according to their investment and any agreements.

A sole proprietorship is a form of business that is owned by a single individual.  • Liability – Due to the lack of legal distinction between the owner and the business, the owner is fully responsible and liable for all debts that the business incurs in the same manner that an individual is fully responsible and liable for all debts that they incur. There is no legal distinction between the assets of the owner of the sole proprietorship and the business; this means that creditors have the ability to come after the owner’s business and personal material assets.   Income Taxes – Since the business is the same as the owner of the sole proprietorship, all profits or losses from the business are filed by the

2. Provide a 100- to 200-word summary in which you provide an example business that you would start for each form. What is legally necessary to file in order to form that business? Discuss at least one of the advantages and one of the disadvantages of that form.

* This depends completely on the owner and there continued ability to operate the business. The operation of the business can be significantly affected if the owner becomes sick or dies.

Liability: The owner/operator of a Sole Proprietorship is subject to full and unlimited financial liability for the business. The owner and the company are legally the same entity. The company’s assets are legally the same as the owner’s personal assets.

Sole Proprietorship: A type of business that is owned by and run by one person with no legal difference between the business and the owner. It is easy to form with no cost or time to initiate. It gives the owner the ability to self-govern the business. There are drawbacks; only one owner can be established not allowing a partner. Also, unlimited liability puts the owner’s personal assets in jeopardy with the creditors.

Describe how your organisation obtains the co-operation of its employees through the contract of employment and employee involvement techniques.

I own and operate Pretty Baked on my own. I chose to be a sole trader because it is the simplest and cheapest structure to establish especially when opening a small business like I am. I receive all the profits but I also suffer all the losses. This structure is suitable for my business because it is easier for a small business and there is no one else to blame but my self. If I put my self in a bad situation, I would have to get out of it my self, which will make me a stronger business woman for further problems to come. Being a sole trader means that I have unlimited liability. This is not necessarily a good thing but it is what I chose, as I have to take responsibility for my business. Due to the unlimited liability, I may be forced to sell

Sole trader-it’s a business that is owned by only one person and it can have one or more employees. This type of business organization often succeeds because the owner has total control of businees, the owner keeps all profit and it’s cheap to start-up,but also it can be difficult to raise financial,it may be difficult to specialise or enjoy economies of scale and can also have problems with continuity if sole trader retires or dies.

Is the most common business type, where the business is operated and owned by a single individual. In this type of business, the sole proprietor provides capital, does not share profit or loss and runs the business alone. As such, the business and the owner are indistinguishable for tax and legal purposes (Dlabay, 2011). To differentiate this business from other business types, a sole proprietorship is discussed under the following characteristics.

Sole traders have unlimited liabilities,meaning that in terms of law there is no separation between them,hence the sole trader is also liable for the debts incurred within the business, which makes it very risky to run for a long-term.