Business Ownership

Question 1

I can identify the different legal structures that businesses adopt

Answer 1

Sole trader, partnership, private limited company (Ltd), public limited company (Plc)

Question 2

I understand what is meant by a sole trader and the benefits and drawbacks of this legal structure.

Answer 2

Definition - A business owned and operated by one person

Benefits - Easy to set up, full control, all profits to owner

Drawbacks - Unlimited liability, limited capital, heavy workload

Question 3

I understand what is meant by a partnership and the benefits and drawbacks of this legal structure.

Answer 3

Definition - A business owned by two or more people

Benefits - Shared responsibility, more capital, diverse skills

Drawbacks - Unlimited liability, profit sharing, potential conflicts

Question 4

I understand what is meant by a private limited company and the benefits and drawbacks of this legal structure

Answer 4

Definition - A company whose shares are owned privately

Benefits - Limited liability, more capital, continuity

Drawbacks - Complex setup, financial disclosure, regulatory requirements

Question 5

I understand the concept of limited liability and which businesses benefit from this.

Answer 5

Owners’ personal assets are protectede liability is limited to the amount invested in the business.

Businesses benefiting - Private limited companies (Ltd), Public limited companies (Plc)

Question 6

I understand what is meant by a public limited company and the benefits and drawbacks of this legal structure

Answer 6

Definition - A company whose shares are traded publicly

Benefits - Limited liability, ability to raise large capital, prestige

Drawbacks - Complex regulations, financial disclosure, risk of takeover

Question 7

I can explain what a not for profit organisation is

Answer 7

Definition - An organization that operates for purposes other than making a profit

Question 8

I can list the reasons a not for profit organisation may set up

Answer 8

Reasons for setting up - Social goals, community service, charitable activities

Question 9

I understand what is meant by a not-for-profit organisation and the benefits and drawbacks of this legal structure

Answer 9

Benefits - Tax exemptions, grants, fulfilling social mission

Drawbacks - Limited funding, volunteer dependency, regulatory scrutiny

Question 10

I can evaluate which legal structure would be the most appropriate for a variety of business examples

Answer 10

Business size and scope, Capital requirements, Liability concerns, Regulatory environment, Long-term goals