Cambridge Igcse BUSINESS STUDY

2. In this unit you will learn about:
→Entrepreneurs
→Sole traders
→Partnerships

3. Businesses are in either the private sector or
the public sector according to whether they are owned
private individuals and organisations or the government.
Even within these categories .however .there
are different types of business organisation and
ownership
All business are owned by individuals or groups of people
→The private sector consists of organisations that are
owned and operated by one or more private individuals
or other private organisations
→The public sector consists of organisations wholly
owned and operated by the national or local government

4. Limited liability
The owners of the business are only
responsible for the debts of the business
up to the amount they have invested in
the business
Unlimited liability
The owners of the business are
responsible for all the debts the
business incurs
Debts must be paid in full by the
owners
Type of investment in which a partner
or investor cannot lose more than
the amount invested. Thus, the investor or
partner is not personally responsible for
the debts and obligations of
the company in the event that these are
not fulfilled
A type of investment in which
a partner or investor can lose an un
limited amount of money. opposite
of limited liability

5. - Separate legal
identify from their
owners
Sole traders and
partnership
Private limited
companies and public
limited companies

6. An entrepreneur is somebody who has the
ability ,enthusiasm ,vision and skills to come
up with a business idea and gather together
the resources to enable production to take
place
Is it worth the risk?
The entrepreneur will take decisions such as
-What goods or services to produce
-How to produce them
-How much to charge
Decisions in business involve some risk.

7. A sole trader or trader is someone who owns his or her
own business . There is one owner who makes all the
decision and is responsible for the day-to-day running
business .A sole trader can employ others . The owner is
self-employed
Setting up as a sole trader
-Must declare any profit or loss made during the financial year
,as this will be their income for tax purposes
-Pay other taxes
-Must comply with employment laws and health and safety
regulations
The main sources of finance
-Loans from family or friends
-Redundancy payments
-Government and other grants
-Bank loan
-Personal savings
-Mortgaging own property
What happens if things go wrong?
The owner has unlimited liability for any
debts incurred by the business
Because a sole trade is an
unincorporated business

8. -Owner works for him or her self
-Low start-up costs
-Few legal requirements
-Owner keeps all profits
-Owner has full control of
business
-Unlimited liability for the owner
-Few sources of finance
-Owner responsible for all
aspects of the business
-owner has to take all decisions
-Usually involves hard work and
long hours

9. A partnership is an unincorporated business that owned by two or more people .The
partners are self-employed.
Setting up a partnership
Many partnerships are established with deed of partnership,and itssets out the rules
of the partnership,including:
-How much money each partner has to put into the business
-Who is responsible for decision-making
-The specific responsibilities of partners
-How the profits of the business are to be shared or used
-the procedure for removing a partner or introducing a new one to the business
-arrangements for dissolving the partnership and ending the business
What happens if things go wrong
As a partnership is an unincorporated business,the paertners have unlimited liability
for any debts the business may have
If one partner can`t pay,the remaining partners are still responsinle for the whole of
the debts of the business

10. -Owners are self-employed
-Owners have full control over
business and profits
-Few legal formalities
-Unlimited liability for each of the
owners
-The partners have full responsibility
for all aspects of the business
-Disagreement between partners
may cause difficulties with the
business
-The business may not survive the
loss of one of the partners