1.2 - Business Ownership

Question 1

Limited liability

Answer 1

the condition by which shareholders are legally responsible for the debts of a company only to the extent of the nominal value of their shares.

Question 2

Unlimited liability

Answer 2

a company whose shareholders will have to use their money or property to pay the company’s debts if it fails financially

Question 3

Sole trader

Answer 3

you run your own business as an individual and are self-employed

Question 4

Partnership

Answer 4

A partnership is an arrangement between two or more people to oversee business operations and share its profits and liabilities

Question 5

Profit

Answer 5

Measures the difference between the values of a business’s revenue and it’s total costs

Question 6

Compamy

Answer 6

Business that has it’s own legal identity

Question 7

Shareholder

Answer 7

A person or organization that owes each part of a company. Each shareholder owns a ‘share’ of the business

Question 8

Stock exchange

Answer 8

Market for buying and selling shares of public limited companies

Question 9

Flotation

Answer 9

When a private ltd company becomes a public ltd company and has shares listed on stock exchange

Question 10

Non for profit organization

Answer 10

Set ip to achieve objectives other then profit eg: charity

Question 11

Advantages of being a sole trader

Answer 11

1) Quick and easy to set up
2) Make all the decisions for yourself
3) Keep all profit

Question 12

Disadvantages of being sole trader

Answer 12

1) Can be stressful making decisions
2) If it goes wrong you have UNLIMITED LIABILITY
3) Alot of work

Question 13

Advantages of partnership

Answer 13

1) Several people involved to contribute money

2) More people involved in discussing problems

Question 14

Disadvantages of partnership

Answer 14

1) Partners may have different ideas ti solve problems

2) Decisions may take longer to make

Question 15

Advantages of a company

Answer 15

1) Limited liability

2) Better status in eyes of some customers

Question 16

Disadvantages of a company

Answer 16

1) Have to register

2) Have to disclose info on sales and profits

Question 17

Private limited company LTD

Answer 17

Cannot advertise shares publically, ususally owned by families. Restrictions can be made on who shares are sold to.

Question 18

Public limited company

Answer 18

Can advertise shares to the public and can be listed on the stock exchange. Must have a share capiyal above £50,000