3.1.2 understanding different business forms

Question 1

what is a sole trader?

Answer 1

one owner of the business who has sole control of the business and does not share profits with anyone else

Question 2

what is a partnership?

Answer 2

the business has 2 or more owners that split the profits

Question 3

what is a private limited company?

Answer 3

owned by shareholders who cannot sell their shares. invited shareholders such a friends and family.

Question 4

what is a public limited company?

Answer 4

owned by shareholders but it’s shares can be freely bought and sold on the stock exchange

Question 5

what is a not for profit business?

Answer 5

it’s main purpose is to achieve a social goal related to helping a particular group in society or environmental concerns.

Question 6

what is a private sector organisation?

Answer 6

owned, financed and run by private individuals

Question 7

what is the role of shareholders?

Answer 7

ultimately have control over the company. receive dividends typically paid twice a year.

Question 8

influences on share price:

Answer 8

state of the economy, decrease in profit, reputation, external factors such as oil and gas prices, proposed takeovers, not adhering to regulation etc.

Question 9

what is market capitalisation?

Answer 9

the value of the company.
share price x number of shares issued.