business ownership

Question 1

what’s is the public sector

Answer 1

organisations owned and controlled by the government

Question 2

give examples of the public sector

Answer 2

armed forces, education.

Question 3

what are the aim and objectives of the public sector

Answer 3

provide a service
improve accessibility to others
avoid wasteful duplication of recourses

Question 4

what is the private sector and give examples

Answer 4

businesses run by private individuals

sole trader, partnerships, Ltd’s and Plc’s

Question 5

what is the deed of partnership

Answer 5

a legal document which is an agreement between partners that sets out the rules of the partnership, such as how the profits will be divided and how the partnership will be valued if someone wants to leave

Question 6

what does the deed of partnership contain

Answer 6

names of partners

how profits are going to be shared

suggests how it can help overcome partnership problems

show proportion of ownerships to determine distribution of profits

show duties/responsibility of partnership indicating who does what

liability of partners in case of business debts

conditions for end of partnerships to show distribution of assets

Question 7

what is unlimited liability

Answer 7

means that the owners of a business are responsible for all of the debts of a business. personal belongings may need to be given up to pay the debts of the business

Question 8

what is limited liability

Answer 8

when the owners of a business are not responsible for the debts of a business. personal belonging will not needed to be given up to pay the debts of the business. the owners however will lose the money they invested in the business if it fails

Question 9

what is a private limited company

Answer 9

businesses which are owned by shareholders who have limited liability. their shares are not available to others except with the agreement of other share holders. they are generally recognised with Ltd after the business name

Question 10

what are the advantages of a private limited company (LTD)

Answer 10

Limited liability - liable only for money invested if business fails the owner will not lose personal possession

continuity - business will not end if one of the shareholders / owners leave

more capital - by selling shares maybe be easier to enter bank loans

specialised management - shareholder / owners / managers can do the work they are skilled at

invited shareholders- able to maintain control

divorce of ownership and control possible - the owner may not spend all time managing

Question 11

what does dividends mean

Answer 11

the term for the share of the profits of limited companies and co-operatives

Question 12

what is meant by charity

Answer 12

organisation set up to provide help and raise money for those disadvantaged in society

they are not established to make profits but they can earn surpluses

charities can often have a narrow focus (single issue) in what they are trying to achieve

charities raise the majority of their finances through voluntary donations, but more and more charities now operate retail outlets as well

Question 13

what is a public limited company

Answer 13

businesses which are owned by shareholders who have limited liability. their shares are available to others by selling to the general public often to the stock exchange. they are generally recognised with plc after the business name

Question 14

what is a sole trader

Answer 14

businesses owned by one person who has limited liability. other people can be employed but there is only one owner.

Question 15

what are the features of a partnership

Answer 15

a business that is owned by between 2 and 20 people

a business that is owned/run by at least 2 people

an unincorporated business

a business with limited liability

Question 16

compare the public sector and the private sector

Answer 16

PUBLIC SECTOR

public provides goods

not affected by recession

helps reduce inequality in society

                PRIVATE SECTOR 

profit incentive to be efficient

entrepreneurs create jobs where needed

doesn’t require taxes to fund

Question 17

what are the advantages of being a sole trader

Answer 17

profit - can keep all profit / no need to share

making decisions - without consulting others / will be speedy

own boss - free to choose what they want to do (hours working)

independence - can work at own place

easy to set up - few formalities therefore cheaper to set up

have a job - may not be able to find a job else where

Question 18

what are the disadvantages of being a sole trader

Answer 18

unlimited liability - responsible for debts of the business

more responsibility - relies heavily on their own ability to make decisions may work long hours and have limited holidays as there is no one to cover them

limited sources of recourses

Question 19

what are the advantages of partnerships

Answer 19

raise more capital than sole traders - individuals may not be able to raise sufficient capital alone

extra skills / expertises in business - may be able to specialise in aspects of business to provide a better service

more people to make decisions - maybe be able to specialise in aspects of business to provide a better service

shared responsibility and more flexibility - reduced pressure on individuals such as duties / working hours able to take time off and debts / losses can be shared

easy to set up - may involve no legal requirements. deeds of partnerships possible

Question 20

what are the disadvantages of partnerships

Answer 20

partners may disagree - time used up in discussion and decisions may take longer

profits will be shared - compared to a sole trader where the owner can keep all profits to themselves

some partners may not work as hard as others may - may demoralise and lead to sediments

the owners will still have unlimited liability - the partners will be held responsible for the debts of the business

continuity - applies to a sole trader but effects on surviving partners if one leaves

Question 21

what are the disadvantages of private limited companies (LTD)

Answer 21

legal procedures in setting up takes time and costs money

profits have to be shared with other share holders

slower decision making - especially if all shareholders have to be consulted

having to disclose the accounts - financial information filed with the registrar can be looked at by the public / competitors

Question 22

what are the advantages of public limited companies (PLC)

Question 23

what are the disadvantages of Public limited companies (Plc)

Question 24

what is a social enterprise

Answer 24

social enterprises are businesses which operate for the benefit of the community, or its workers, or as a charity

Question 25

what is a co-operative

Answer 25

a business organisation that is owned by its customers / workers / producers / members they have a common purpose or aim they receive dividends they share / are consulted in decision-making

Question 26

what are examples and advantages of social enterprises and co-operatives

Answer 26

examples:
eden project
co-operative

Advantages
community interested company
positive public relations
benefits society