Business organization

Question 1

Sole trader

Answer 1

A business owned by one person.

-unlimited liability

Question 2

Advantages_sol tra

Answer 2

_The owner can keep all the profits.

_Owner has can make his own decision and has full control of their business.

Question 3

Disadvantages_sol trad

Answer 3

The owner is fully responsible for the expenses. eg dept.

unlimited liability

Question 4

Partnership

Answer 4

_This is a business that is owned by two or more business apx. 2-20

Question 5

Advantages_ Partner

Answer 5

Partner may have needed skills that may hello out the business.

Question 6

Disadvantage_partners

Answer 6

Disagreements( cause fights that may slow the business)

Question 7

Private limited company_Prlc

Answer 7

The shares of a private limited company are usually held by friends and family so there are s small number of shareholders.

Question 8

Public limited company_Pulc

Answer 8

Shares are offered to the public

Question 9

Advantage of being limited

Answer 9

easier to raise funds- able to sell shares.

Shareholders have limited liability.

Question 10

Disadvantage of being limited cop

Answer 10

The accounts of the company have to be published for the publics to see. This may give competitor’s a chance.

Not easy to set up- many legal formalities.

Question 11

co -operative

Answer 11

Are democratic

Usually get some tax relief from government.

limited liability.

Question 12

Disadvantageof co-op

Answer 12

Members may not have the skills to run the business, so they hire people. This cots money

Its difficult to raise finances as a co-op cannot issue shares.

Question 13

Franchise

Answer 13

A form of buisness org_ that allows a company/person to buy the rights to use and existsting(franchisor) brand name and g and s’s.

Question 14

Advantage_fran

Answer 14

Greater chance of success as they are selling a well known product.

Easier to gain loans from a bank, as the business is seen to be low-risk.

Question 15

Disadvatnages_ fran

Answer 15

High upfront costs_ license fee and percentage of the revenue to the franchisor.

No control over business- as most decisions are corporately made

Question 16

Social enterprise

Answer 16

Business with social objectives and ethical values aimed benefitting the community.

Question 17

Social enterprise_aims

Answer 17

Not- for profit- enterprise
-involved in the production of goods and services but in a socially responsible way.

-often sell goods and services_ in order to reinvest profits into the business. _ not for profit maximisation.

Question 18

Charities_aims

Answer 18

Raise money- by doing fundraising activities and collecting donations.

Charities that provide quick aid to solutions to immediate problems eg. disaster.

Question 19

Charities_ advantages

Answer 19

Job satisfaction for employees is high as they know they have made a difference to people in need.

Positive changes to people and communities.

Question 20

Charities_ disadvantage

Answer 20

Social enterprises may be less competitive in the market due to limited capital.