HomeJSS 1Business Studies JSS 1Sole Trade and Partnership Business: Differences, Advantages & Disadvantages

Sole Trade and Partnership Business: Differences, Advantages & Disadvantages

 

Business Studies JSS 1 – Second Term Lesson Plan

Week 5: Sole Trade and Partnership Business

Lesson Plan Presentation

Subject: Business Studies

Class: JSS 1

Term: Second Term

Week: 5

Age: 10–12 years

Topic: Sole Trade and Partnership Business

Sub-topic: Features, Advantages, and Disadvantages of Sole Trade and Partnership Business

Duration: 40 minutes

Behavioural Objectives

By the end of the lesson, students should be able to:

  1. Define sole trade and partnership business.
  2. Explain the differences between sole proprietorship and partnership.
  3. Identify the advantages and disadvantages of each business type.
  4. List the sources of capital for both types of businesses.
  5. Explain the meaning and importance of a partnership deed.

Keywords

  • Sole trade
  • Sole proprietorship
  • Sole trader
  • Partnership
  • Capital
  • Liability
  • Profit
  • Partnership deed

Set Induction

The teacher asks students:

  • Have you ever seen a small business run by just one person?
  • What happens when two or more people join together to start a business?
  • Which type of business do you think is better: one person owning a business or a group of people owning it together?

After students respond, the teacher introduces the topic by explaining that businesses can be owned by one person (sole trade) or by a group of people (partnership).

Entry Behaviour

Students already have an idea about businesses and entrepreneurship from previous lessons.

Learning Resources and Materials

  • Charts showing types of businesses
  • Pictures of sole traders and partnership businesses
  • Case study of a successful sole trader and a partnership business

Building Background/Connection to Prior Knowledge

Students have learned about entrepreneurship and its importance. Now, they will learn about different forms of business ownership.

Embedded Core Skills

  • Critical Thinking
  • Problem-Solving
  • Communication
  • Decision-Making

Reference Books

  • Lagos State Scheme of Work
  • Business Studies for JSS 1 by A. O. Yusuf
  • Essential Business Studies for Junior Secondary Schools

Instructional Materials

  • Whiteboard and markers
  • Posters listing features of sole trade and partnership
  • Examples of sole traders and partnerships in Nigeria

Lesson Content

Definition of Sole Trade

Sole trade, also known as sole proprietorship, is the oldest and simplest form of business. It is owned, managed, and controlled by one person who takes all the profit and bears all the risks.

Examples of Sole Traders

  1. Shoe mender
  2. Law firm owner
  3. Kiosk owner
  4. Farmer
  5. Provision store owner
  6. Barber
  7. Tailor
  8. Local food vendor
  9. Hairdresser
  10. Photographer

Features of Sole Trade

  1. Owned and controlled by one person.
  2. Established to make a profit.
  3. Easy to set up.
  4. Owner makes all decisions.
  5. Business can end when the owner dies.

Sources of Capital for Sole Trade

  1. Personal savings.
  2. Loans from friends and family.
  3. Loans from banks and government.

Advantages of Sole Trade

  1. Easy to start.
  2. Requires little capital.
  3. Owner enjoys all the profits.
  4. Quick decision-making.
  5. Business is flexible.

Disadvantages of Sole Trade

  1. Owner bears all risks.
  2. Long working hours.
  3. Business may end if the owner dies.
  4. Wrong decisions can lead to business failure.
  5. Unlimited liability (owner is responsible for all debts).

Definition of Partnership Business

A partnership business is a type of business owned and managed by two to twenty people who share profits and risks.

Examples of Partnership Businesses

  1. Law firms
  2. Accounting firms
  3. Medical clinics
  4. Construction companies
  5. Supermarkets run by partners
  6. Agricultural cooperatives
  7. Transport businesses
  8. Car repair workshops
  9. Photography studios
  10. Real estate firms

Features of Partnership Business

  1. Owned by 2 to 20 people.
  2. Not a separate legal entity.
  3. Liability is unlimited.
  4. Profit and loss are shared based on agreement.

Sources of Capital for Partnership Business

  1. Partners’ contributions.
  2. Admission of new partners.
  3. Reinvesting profits into the business.
  4. Loans from banks.

Types of Partners

  1. Active Partner – Takes part in daily business activities.
  2. General Partner – Has unlimited liability and manages the business.
  3. Sleeping Partner – Contributes capital but does not manage the business.

Meaning of Partnership Deed

A partnership deed is a written agreement between partners that states:

  • The name of the business.
  • Names of the partners.
  • Amount of capital contributed.
  • Nature of the business.
  • How profit and loss will be shared.

Advantages of Partnership Business

  1. More capital than sole trade.
  2. More business ideas from different partners.
  3. Financial risk is shared.
  4. Better decisions are made.
  5. Business can grow into a bigger company.

Disadvantages of Partnership Business

  1. Decision-making takes longer.
  2. Disagreements may end the business.
  3. Liability is unlimited.
  4. Death of an active partner may affect the business.

Evaluation

Fill-in-the-Blank Questions

  1. A business owned and run by one person is called ________.
    a) Partnership
    b) Corporation
    c) Sole trade
    d) Franchise

  2. The owner of a sole trade is called a ________.
    a) Partner
    b) Sole trader
    c) Shareholder
    d) Investor

  3. A partnership business can have a maximum of ________ partners.
    a) 5
    b) 10
    c) 20
    d) 50

  4. The document that outlines partnership agreements is called a ________.
    a) Business license
    b) Partnership deed
    c) Loan agreement
    d) Tax document

  5. One advantage of sole trade is ________.
    a) Business is easy to start
    b) Decisions take a long time
    c) Many people own the business
    d) Losses are shared

Class Activity Discussion (FAQs with Answers)

  1. What is a sole trade?

    • It is a business owned and run by one person.

  2. What is another name for sole trade?

    • Sole proprietorship or one-man business.

  3. What is a partnership business?

    • A business owned by two to twenty people.

  4. Why is a partnership deed important?

    • It states the terms of agreement among partners.

  5. How do sole traders get money to start a business?

    • From personal savings or loans.

  6. Who takes business decisions in a sole trade?

    • The sole trader.

  7. What happens if a sole trader dies?

    • The business may end.

  8. Why is decision-making slow in a partnership?

    • Because many people must agree.

  9. How is profit shared in a partnership?

    • Based on the agreement between partners.

  10. Why is unlimited liability a disadvantage?

  • Partners must pay business debts with personal money.

Presentation

  1. The teacher revises the previous topic (Entrepreneurship).
  2. The teacher introduces the new topic by explaining sole trade and partnership.
  3. The teacher allows students to contribute and corrects them where necessary.

Assessment (Evaluation Questions)

  1. Define sole trade.
  2. List three examples of sole traders.
  3. State two advantages of partnership.
  4. What is a partnership deed?
  5. Give one source of capital for a sole trader.

Conclusion

The teacher marks students’ work and provides feedback.

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