1.5.4 Business forms

Question 1

What is a sole trader?

Answer 1

business with one owner

Question 2

What do sole traders have to do?

Answer 2

pay income tax
licence to trade
planning permission

Question 3

3 adv of sole traders?

Answer 3

profit isn’t shared
no disagreements
don’t have to share finance info

Question 4

3 disadv of sole traders?

Answer 4

unlimited liability
stressful
hard to gain loans

Question 5

What are partnerships?

Answer 5

businesses run by 2 or more people

Question 6

What is a deed of partnership?

Answer 6

document stating the names of partners

how profit is shared

Question 7

3 adv of partnerships?

Answer 7

easy to set up
specialise in certain area
gain high capital

Question 8

3 disadv of partnerships?

Answer 8

unlimited liability
share profit
may disagree

Question 9

What is a limlited partnership?

Answer 9

partners that provide capital but take no part in running the business (sleeping partner)

Question 10

What is a limited company?

Answer 10

separate legal identity from owners
capital is raised by shares
limited liability

Question 11

What is a private limited company?

Answer 11

limited liability company

Question 12

3 adv of private limited company?

Answer 12

capital raised by shares
cannot lose control
owners pay less tax

Question 13

3 disadv of private limited company?

Answer 13

have to publish financial info
profit shared
cannot raise lots of money

Question 14

Define franchising?

Answer 14

business allows another firm right to use brand and products

Question 15

What does the franchisee have to pay for?

Answer 15

start up costs
% of right to use name
one off fees

Question 16

3 adv of franchisees?

Answer 16

less risk
gets full support
set up costs are predictable

Question 17

3 disadv of franchisees?

Answer 17

profit is shared
lose independence
strict operating rules

Question 18

3 adv to franchisors?

Answer 18

fast method of growth
cheap
motivated

Question 19

3 disadv to franchisors?

Answer 19

potential profit shared
damage to reputation
cost of supporting is high

Question 20

what is a social enterprise?

Answer 20

aim of improving human and environmental issues and well-fare

Question 21

What is a co-operative?

Answer 21

owned and controlled by members who can purchase shares

Question 22

What is a workers co-operative?

Answer 22

jointly owned by their employees

Question 23

What is a mutual organisations?

Answer 23

owned by customers and offer financial services such as mortgages

Question 24

What is a lifestyle business?

Answer 24

aims to make enough money to provide the flexibility needed and sustain certain lifestyle

Question 25

What is stock market flotation?

Answer 25

occurs when firm goes public and sells their shares to the public for the first time

Question 26

What is another name for stock market flotation?

Answer 26

initial public offering

Question 27

What does the prospectus that firms publish before selling shares publicly have in it?

Answer 27

brief history
financial details
future strategies

Question 28

3 adv of public limited company?

Answer 28

limited liability
dominate market
economies of scale

Question 29

3 disadv of public limited company?

Answer 29

expensive
inflexible because of size
outsider can take control

Question 30

What are non-monetary opportunity costs?

Answer 30

when impact is personal and effects peoples happiness

Question 31

Define a trade off?

Answer 31

where a decision maker faces a compromise between two different alternatives

Question 32

3 benefits of running own business?

Answer 32

independence
flexibility
job satisfaction