Business Ownership

Question 1

Reasons for starting a business

Answer 1

Freedom of being own boss
An enjoyable challenge
Help others

Question 2

How a business starts

Answer 2

Decide on product
Get materials
Design business plan
Study the market
Research the market
Research the price
Work out costs and profit margin
Research where product will be sold to

Question 3

What is a private sector business?

Answer 3

Any business which is owned by private people

Question 4

Types of owners

Answer 4

Sole trader
Partnership
Private limited company
Public limited company

Question 5

Sole trader?

Answer 5

Business which is fully owned by one person and has full control

Question 6

Partnership

Answer 6

2+ ppl combine to start a company

Question 7

Private limited company

Answer 7

A business which is incorporated and therefore a separate legal entity from its owners

Question 8

Public limited company

Answer 8

Can offer shares to the public in exchange for stock exchange

Question 9

Sole trader advantages and disadvantages

Answer 9

Pro - all profits kept, better control, financial privacy
Con - long hours, lack of continuity, lack of expertise

Question 10

Partnership pros/cons

Answer 10

Pros = low start up costs, shared workload, effective decision making
Cons = conflict, lack of continuity, unlimited liability

Question 11

What is needed for a limited company?

Answer 11

Memorandum of association and articles of association to companies house