Business Ownership and Liability
Who owns a business, and who pays if it fails? Learn the main types of ownership, the vital difference between limited and unlimited liability, and how a franchise works.
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Whose business is it? 🏪
When you start a business, two big questions are: **who owns it**, and **who is responsible for its debts**? The answers depend on the type of ownership you choose.
The main types 🔑
These are the common ways to own a small business:
Who pays the debts? ⚖️
Liability decides how much of your own money is at risk.
Protected owners 🎯
Which type of business gives its owners limited liability?
- A private limited company
- A sole trader
- A partnership
- None of them
Who owns it? 🔗
- Sole trader
- Partnership
- Private limited company
- Franchise
- One person owns and runs the whole business
- Two or more people own it together
- Owned by shareholders with limited liability
- Trades under an established brand for a fee
Buying a brand 💡
A franchise lets someone trade under an established brand. The franchisee pays fees to the franchisor and follows their rules, but gets a known name, training and support. It lowers the risk of starting from nothing, though it costs a share of the profit.
Franchise perks ✅
Which THREE are advantages of running a franchise?
- A well-known brand from day one
- Training and support from the franchisor
- Lower risk than starting alone
- No fees at all to pay
- Complete freedom to do anything
A growth story 🪜
An interactive activity.
Complete the idea 🧩
A _____ is owned by just one person, who has _____ liability and could lose personal assets. A private limited company is owned by _____ and gives them _____ liability, so they only risk what they invested. A _____ lets an owner trade under an established brand for a fee.
True or not? 🖍️
An interactive activity.
Main advantage 🔀
- Sole trader
- Partnership
- Private limited company
- Franchise
- Keeps all the profit and makes every decision
- Shares the workload and brings in more skills
- Protects owners with limited liability
- Starts with a known brand and support
Which structure? 🧭
An interactive activity.
By personal risk 📊
An interactive activity.
Explain liability ✍️
An interactive activity.