Business ownership — OCR GCSE Study Guide
Exam Board: OCR | Level: GCSE
Mastering the different types of business ownership is essential for any GCSE Business student, as it forms the foundation of how enterprises operate and grow. Understanding the critical distinction between limited and unlimited liability will help you confidently evaluate the best legal structure for any given business scenario in the exam.
Overview
This study guide covers the four main legal structures of business ownership: sole traders, partnerships, private limited companies (Ltd), and public limited companies (PLC). It explores the crucial concept of limited versus unlimited liability and evaluates the suitability of these structures for various business contexts, from small start-ups to large established enterprises. Examiners expect candidates to not only define these terms but to apply them accurately to specific case studies, justifying why one form of ownership is more appropriate than another based on the owner's needs for control, finance, and risk management.
Key Concepts
Sole Traders
Definition: A business owned and run by one person.
Features: The owner makes all decisions, keeps all profits, and has unlimited liability.
Exam Relevance: Examiners frequently use sole traders as the starting point for a business in a case study. You must understand the risks involved, particularly unlimited liability, and why a sole trader might eventually choose to incorporate as the business grows.
Partnerships
Definition
Continue revising: Browse all Business OCR GCSE topics →
