Unit 1, Task 2- types of businesses in UK

 Sole traders are most common in the beginnings or start-up of a business. Sole traders are people who run a business independently and are self-employed and after paying tax, they keep all the profits. These types of businesses are simpler to set up but a sole trader is fully responsible for their business and any losses/ debts made. This adds to accounting responsibilities. A creative example of a sole trader could be freelance videographers/ photographers.

Partnerships are like sole traders in that they are usually used at the beginning of a business and are the simplest way for more than one person to run a business. The multiple owners will usually write up a deed of partnership. These will outline the amount of capital each person has contributed into the business, how losses and profits will be shared and the type of partnership between the people and business.

Partnerships can also have a ‘sleeping partner’ who invests in the company but doesn’t offer any support in running the business or the direction it goes in. Therefore, their only interest is making money from the business.

Social enterprises are usually businesses with a social mission, wanting to make an impact in society. The profits made in these businesses are usually reinvested or donated to their cause, like a charity. Therefore, they positively impact people or the planet. Social enterprises collectively contribute £22 billion to the economy. An example of a creative social enterprise could be The Big Issue, who raise money for their vendors by selling their magazine.

Charities must demonstrate a charitable purpose and a public benefit. Like social enterprises, these organisations need a social mission to benefit people or the planet. The profits of a charity cannot be used for personal/ private benefits and are usually made through fundraising or donations. An example of a creative charity is Young Classical Artists Trust which aims to raise money to support emerging young artists.

Social enterprises usually sell or provide products to make profits that they then reinvest.

Unincorporated associations are organisations set up by a group of people with another goal than to make profits. For example, an arts club who agree to split the cost of materials used. They are usually cheap and easy to run but individual members are personally responsible for any losses or debts made from this organisation