What do you remember from ‘Understanding Markets’ ….

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Choosing the right legal structure

By the end of this lesson you should be able to:

1. Understand why it is important to have the right legal structure and recognise the sector they fit into.

2. Identity and explain the key features, benefits and drawbacks of various types of business.

3. Evaluate the most appropriate business structure for particular situations.

Learning Objectives

Why it is important to choose the right legal structure for a business:

The records and accounts that have to be kept

Tax and National Insurance Liability faced by owners if a business fails Sources of finance available to owners The way that decisions are made

What is the right legal structure?

LO1) Understand why it is important to have the right legal structure and recognise the sector they fit into.

Business Sectors

? What do we mean by

the public and private sector?

Can you think of any examples of businesses that fit in these sectors?

LO1) Understand why it is important to have the right legal structure and recognise the sector they fit into.

Business SectorsCan you put the correct type of Business

ownership in each sector?

LO1) Understand why it is important to have the right legal structure and recognise the sector they fit into.

PUBLIC SECTOR PRIVATE SECTOR

SOLE TRADER

PARTNERSHIPS

PRIVATE LIMITED (LTD)

PUBLIC LIMITED (PLC)

GOVERNMENT

What business sector?

LO1) Understand why it is important to have the right legal structure and recognise the sector they fit into.

Over to you….

Research and prepare a presentation based on one of the following forms of ownership:

Sole Traders Partnerships Private Limited Companies Public Limited Companies Not-For-Profit Businesses

Prepare to present back to the rest of the group.

LO2) Identity and explain the key features, benefits and drawbacks of various types of business.

During feedback, summarise key points from your peer presentations.

Be prepared to answer questions.

What type of ownership?

LO2) Identity and explain the key features, benefits and drawbacks of various types of business.

Choose your perfect home and car….

You own a business and are looking into different types of business ownership….

Why is the legal structure so important?

LO2) Identity and explain the key features, benefits and drawbacks of various types of business.

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Limited and Unlimited Liability

Unlimited Liability Limited Liability• The finances of a business are

treated as inseparable from the finances of business owners.

• Personal assets can be seized by creditors in order to meet outstanding depts.

• If insufficient funds raised then the owner can be made bankrupt.

• Regarded as unincorporated.

• The legal duty to pay debts run up by a business stay with the business itself.

• Courts can make a firm sell off assets.

• If insufficient funds then a firm can be forced to close down.

• Regarded as incorporated.

Create a question based on todays lesson.

Finally…..

You should now be able to:

1. Understand why it is important to have the right legal structure and recognise the sector they fit into.

2. Identity and explain the key features, benefits and drawbacks of various types of business.

3. Evaluate the most appropriate business structure for particular situations.

Re-cap Learning Objectives