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...y good at handling the accounts. • Sole traders often work long hours and find it difficult to take holidays, or time off if they are ill. • There is also the risk of unlimited liability, where the sole trader can be forces to sell personal assets to cover any business debts. Legal Requirements Plc The legal requirements for setting up a plc are: • You have to register with the registrar of companies house • The company is a legal entity in its own right and can be sold, or buy shares in other companies, it has ‘perpetual existence’ A new company must: • Give details of its constitution in the form of a memorandum and articles of association. • Give details of its directors, company secretary and members • Have a registered office. • It must have an authorized share capital of at least 50,000. • Before it can start a business, it must allotted shares to the value of at least 50,000, A quarter of them, 12,500, must be paid to the company, together with the whole of any premium. Sole-Trader The legal requirements for being a sole-trader are: • You need to register with inland revenue as self-employed • If the business fails, then the owner is fully responsible for all the business’ depts. • Self employed status: Even if the owner doesn’t draw on his profits they are still taxed. Losses can be offset against tax on other income. • Unlike other business formats, sole traders can start trading straight away, although certain types of businesses may need a license to trade. • If trading under a name other than t hat of the owner, one must display the name and address of the owner at the premises and on the stationary (Business Names Act 1985) Liability PLC Shareholders in a PLC have limited liability. Shares in the company can be bought and sold freely by anybody or even by another company. 'Limited liability' means that in the event of company failure e.g. bankruptcy, the financial responsibility of the individual shareholders is restricted to the face value of his/her shares (in other words personal assets cannot be touched). Sole-Trader A sole trader has unlimited liability and the owner is personally responsible for the firm's debts, and may have to pay them out of his/her own pocket if the firm becomes bankrupt. This means that the owner may lose all his possessions to pay off his debts if the company fails – losing his house, car etc. Size The above 2 types of ownership relate to the Size of the Businesses, A PLC company, like MacDonald’s for example needs millions of pounds to set up a business, and need people or businesses to buy shares to start up their business, while a Sole-Trader needs next to nothing money to set up their business, for example a window cleaner needs only a bucket, a van and some sponges. MacDonald’s depends on shares to keep the business running after setting up the business, there are many shareholders in MacDonald’s. John treasure doesn’t need shareholders as it’s a sole trader and depends on the products it sells to bring in the main income for the business. Companies like McDonalds cant run on its own money as it would cost billions of pounds INDUSTRIAL SECTORS The 3 Sectors There are many different types of industries in the economy today; these industries can be divided and put into 3 different sectors. The Primary Sector Industries in the primary sector can be described as extractive industries. They take raw materials from both land and sea. This includes: • Fishing • Farming • Mining • Forestry The Secondary Sector Industries in the secondary sector can be described as manufacturing or construction industries. They take the result of the primary sector and turn it into a product. This includes: • Butchery • Rubber Plantations • Car manufacturers • Construction The Tertiary Sector Industries in the tertiary sector don’t make anything; instead they buy their products or get their products from the secondary sector. They then sell their products to other companies or the general public This includes: • Retailing • Restaurants • Health Care • Communications Companies and their sectors John Treasure and McDonalds both relate to the same industrial sector, even though the 2 companies are nothing like each other and are completely different. They both relate to the secondary and tertiary industrial sectors. John Treasure John Treasure is in the secondary sector because they convert materials into products such as suits for example. John Treasure is also in the tertiary sector because after the products are made John Treasure also sell the products to the public. McDonalds McDonalds are in the secondary sector because they use their convert their meat into burgers. They are in the tertiary sector because they then sell their burgers and products to the public. Trends in each sector Employment in each of the three sectors have changed over the past few years, some have higher employment rates today then they did 5 years ago and some have lower employment rates today then they had 5 years ago. Primary Sector Employment Employment in this sector has incr...