For this task we were asked to research three different types of businesses and write a explanation for each one to explain what they are. Then conclude which business would be appropriate for me personally.
The three types of Business
- Self Employed ‘Sole Trader’
- Limited Company
Sole Trader – if you register yourself as self employed to the government this then means that you have your own business and are then responsible to pay your taxes accordingly to what the business has made in every working tax year which is April to October. Being self employed means that the business is owned by one person in particular, this person receives all the profit and has full responsibility for any financial issues which could be losses in money or debt that they may owe. The name that is down to own the business are personally liable for any of the firm’s debts which may have to be paid out of their own money if possible. Being self-employed is the simplest form of business that you can run solely on your own. Business such as Hairdressers, Electricians and photographers are all sole traders, they provide a specialist freelance service.
Partnership– A partnership is where a business is owned by two people or more, every single owner of the business is as equally personally liable and responsible for any debts that the business may incur. Owning a business with someone else means that you are not running it alone, you have the support of other people, the money and effort that is put into the business will be double as you have both invested time and money into the business that you do not want to lose. However, because there is more than one person in a partnership, this then means that decisions are hard to make as not everyone agrees with each other and decisions can lead to the business not being as successful which can then lead to debts and loss of profits in the business which can be devastating. Although partnership’s can be a wise decision as it is always beneficial to share expertise.
Limited Company –A limited company means that it is incorporated, which means that the business has it’s own legal identity; the ownership for the business is split equally into shares. Share holders can then invest in the company. Being a limited company means that the business can never lose more than what they originally invested in the company, which is a massive advantage to being a limited company.
This activity I found helpful as it has made me aware of the different types of business there are, which allows me to see the options that I can have in my future if I was to invest in having my own business is some shape or form, i.e. one of the above. I think the most appropriate option of business for me would probably be either registering myself as a sole trader or to invest in a business with someone else who has great expertise which are different to mine so that we can use our best potential to create a successful business in photography.