26 Forms of Business

Question 1

Sole traders

Answer 1

An individual owning the business on their own.

Question 2

Partnership

Answer 2

A business is started and owned by more than one person.

Question 3

Incorporated business

Answer 3

A company with a separate legal entity

Question 4

Unincorporated business

Answer 4

Owner is the business- no legal separation

Question 5

limited partnership

Answer 5

where some partners provide capital but take no part in the management of the business. Such a partner will have limited liability – the partner can only lose the original amount of money invested.

Question 6

limited companies

Answer 6

has a separate legal identity from its owners. The company can own assets, form contracts, employ people, sue people and be sued.

Question 7

private limited company

Answer 7

Shares can only be transferred privately, from one individual to another. All shareholders must agree on the transfer and they cannot be advertised for sale. The directors of private limited companies tend to be shareholders and are involved in running the business.

Question 8

franchising

Answer 8

An agreement in which the franchisee buys the rights to sell the goods or services of the franchisor and is allowed to use the franchisee’s name.

Question 9

social enterprise

Answer 9

These organisations trade with the aim of improving human and environmental well-being, rather than making profit for external owners.

Question 10

lifestyle business

Answer 10

Owneraims to make enough money and provide the flexibility needed to pay for a particular lifestyle. The business should be profitable enough to support the desired lifestyle without having to sacrifice time for the entrepreneur’s personal life.

Question 11

online business

Answer 11

use the Internet to trade