1 Business & Its Environment - 1.2 Business Structure

Question 1

Define Public Sector

Answer 1

Organisations accountable to and controlled by local/central governments (the state)

Question 2

Define Private Sector

Answer 2

Business that are owned and controlled by individuals/groups of individuals.

Question 3

What are the 7 Legal Structures?

Answer 3

1. Sole Trader
2. Partnerships
3. Private Limited Company (Pvt. Ltd)
4. Public Limited Company (Pub. Ltd)
5. Franchises
6. Co-operatives
7. Joint Venture

Question 4

Define Sole Trader

Answer 4

One person provides the permanent finance & had full control over the business and profits. Unlimited liability.

Question 5

Define Partnership

Answer 5

2-20 people, shared responsibility and capital

Question 6

Define Private Limited Company (Pvt. Ltd)

Answer 6

Small to medium sized, fixed group of shareholders. Can not sell shares to the general public. Limited Liability.

Question 7

Define Public Limited Company (Pub. Ltd)

Answer 7

Often large limited companies. Have the legal right to sell shares to the general public. Share prices are quoted on the National Stock Exchange (NSE)

Question 8

Define Franchise

Answer 8

Using the same name, logo and trading systems of existing successful business.

Question 9

Define Co-operatives

Answer 9

Common in agriculture, retailing. All members contribute, get one vote each and equal profit share.

Question 10

Define Joint Venture

Answer 10

2 or more businesses work closely together on a certain project. Create a separate business division for this.

Question 11

Define MOA (Memorandum of Association)

Answer 11

Name, address (head office), maximum share capital and declare aim

Question 12

Define AOA (Articles of Association)

Answer 12

Internal workings and control; names of directors and procedures, etc.