1.5.4 Forms Of Business

Question 1

Sole trader

Answer 1

Owned by self employed individuals
Easy to start up
Requires wide range of skills + flexibility

Question 2

Partnerships

Answer 2

Business owned by two or more individuals
Joint ownership of running a business

Question 3

Ltd

Answer 3

Owned by shareholders separate legal entity
Limited liability
Wider access to capital

Question 4

Plc

Answer 4

Large publicly owned companies
Has ability to take over other businesses
Can lose control of business

Question 5

Franchise

Answer 5

Limited company that licences right for individuals or groups to set up an identical operation in a new region
Allows business to expand without owners taking direct responsibility for each brand/store/division
+ effective way to grow business
- risk of franchisee damaging brand if not run effectively
- expensive

Question 6

Social enterprise

Answer 6

Not for profit organisations including cooperatives, mutual organisations + charities

Question 7

Online businesses

Answer 7

Could be run as any legal form, but providing products and or services solely through internet

Question 8

Lifestyle businesses

Answer 8

A busi run order to sustain a particular lifestyle

Question 9

Stock market flotation

Answer 9

Occurs when a company goes public + becomes a plc