1.2 business entities

Question 1

private sector

Answer 1

businesses that are controlled by private individuals ( not the government)

Question 2

features of the private sector

Answer 2

profits earned by owners
private ownership and control
largely privately funded
no gov involvement

Question 3

what does the private sector contain

Answer 3

sole traders, partnerships, privately held companies, and publicly held companies

Question 4

the public sector

Answer 4

portion of the economy controlled or owned by the government such as schools

Question 5

features of the public sector

Answer 5

owned and controlled by the government
provides essential goods for citizens
financed by government tax

Question 6

for-profit commercial enterprise

Answer 6

a type of business that earns profits which are distributed to owners or shareholders- profit usually main objective

Question 7

4 main types of ownership structures

Answer 7

sold traders
partnerships
for-profit privately held companies
for- profit publicly held companies

Question 8

sole traders

Answer 8

individuals who own and rune businesses alone. little distinction between business and individual- cannot be inherited

Question 9

advantages of sole traders

Answer 9

easy to set up, all profits go to the owner, fast decision making, financial record kept private, personal service

Question 10

disadvantages of sole traders

Answer 10

unlimited liability- personal assets go into debt
difficult to finance
high risk failure
high workload
lack of continuity
possibly higher tax

Question 11

parternship

Answer 11

creation of a business by 2 or more individuals.

Question 12

agreements made in a partership

Answer 12

amount of money put in by each partner
sharing profits and losses
the role and responsibilities of each partner
rules around accepting new partners
procedures for ending partnership

Question 13

advantages of partnership

Answer 13

easy to set up
greater access to finance
greater efficiency and productivity
private financial records

Question 14

disadvantages of a partership

Answer 14

unlimited liability- personal debts
lengthier decision making and possible disagreements
legal and financial responsabilities
lack of continuity

Question 15

companies

Answer 15

large organisation owned by many individuals know as shareholder

Question 16

people who own companies can

Answer 16

vote at annual general meeting
recieve parts of company profits in the form of dividens

Question 17

limitted liability

Answer 17

owners business are not personally responsible for the debts of the business if it fails. the owner and the business are legally seperated.

Question 18

privatley held companies

Answer 18

often have family and friends as shareholders. shares are not sold or traded on stock exchange
eg: Lego, ikea

Question 19

documents required before privatley held companies can operate

Answer 19

memorandumof asssociation
article of association

Question 20

advantages of privatley held companies

Answer 20

-control and ownership
- greater access to finance
- limited liability
- financial records

Question 21

disadvantes of privatley held companies

Answer 21

profit are shared
lengthier decision making
shares cannot be traded publicly to raise finances
privacy is worse
expensive and timeconsuming

Question 22

publicly held companies

Answer 22

a company that is publicly owned and has many shareholders who buy ad sell their shares through stock exchange.. recieve profit as dividends
eg: samsung, apple

Question 23

advantages of publicly held companies

Answer 23

finances
risks shared
seperate legal identity
limited liability

Question 24

disadvantages of publicly held companies

Answer 24

profits are shared between shareholders
high costs
loss of control
accounts are publicly available to be viewed

Question 25

for - profit businesses

Answer 25

A type of social enterprise that earns revenue and profits, but integrates social and/or environmental impact directly into its business model.

Question 26

social enterprises

Answer 26

hybrid organisations that conbine the best of private and public sectors- focus on social and enviormental issues

Question 27

what do for profit social enterprises focus on

Answer 27

profit on making a multi- stakeholder impact rather than profit.

Question 28

types of for-profit social enterprises

Answer 28

private sector enterprises, public sector enterprises and cooperatives.

Question 29

private sector for profit social enterprise

Answer 29

A type of social enterprise that produces goods and services that are typically sold in markets for a price by for-profit businesses.

Question 30

public sector for-profit social enterprises

Answer 30

A type of social enterprise that produces goods and services that are typically provided by the public sector.

Question 31

coopoeratives

Answer 31

business that is owned and operated by members, who share the profits
eg:
housing, agriculture, insurance, banking, healthcare

Question 32

non - profit social enterprises

Answer 32

A type of social enterprise that produces goods and services to meet human needs, but where any surpluses earned must, by law, be reinvested back into the business

Question 33

managing complex supply chains

Answer 33

As with commercial businesses, for-profit social enterprises may need to outsource or offshore part of their production processes.. If a supplier exploits labour resources or damages the environment, this can damage the mission and reputation of the business.

Question 34

non-profit socia enterprise

Answer 34

A type of social enterprise that produces goods and services to meet human needs, but where any surpluses earned must, by law, be reinvested back into the business.

Question 35

do non profits have limited liability?

Answer 35

yes addicionaly they rely on volanteers to keep costs low.