ch 26

Question 1

sole trader

Answer 1

is a simplistic business owned by one person

Question 2

legal responsibilities for sole tader

Answer 2

1-pay taxes and other government charges
2-once turnover reaches a certain level they must register for value-added tax
3-they need a license to trade if they are involved in activities
4-need planning permission
5-legislation for business practice

Question 3

advantages

Answer 3

-owner keeps all the profit
-has complete control(to make all decisions)
-simple to set up no legal requirements
-flexible can adapt to change quickly
-can offer a personal service (specialized)
-may qualify for government help

Question 4

disadvantages

Answer 4

-unlimited liability
-may struggle to raise finance
-independence may be a burden if sick no one to take over
-very long hours (stress)
-cant exploit economies of scale

Question 5

partnership

Answer 5

a business organization owned by 2-20 people

Question 6

what is the one legal requirement

Answer 6

deed of partnership or partnership agreement

Question 7

what does the deed include

Answer 7

-how much capital each partner will contribute
-how profits will be shared
-the procedure for ending partnership
-how much control each partner has

Question 8

advantages of partnership

Answer 8

-easy to set up and run with little to no legal requirement
-partner can specialize in area
-Share the burden (less stress)
-owners can raise more capital(working capital)
-not have to publish financial info

Question 9

dis of partnership

Answer 9

-unlimited liability
-share profit
-my disagree arguments
-one partners decision can influence all the others
-limited growth potential 20 partners

Question 10

limited partners

Answer 10

these are partners who have a limited liability they are called sleeping partners
they do not take part in any decision-making
there still must be one unlimited partner this also allows the business to exceed 20 partners

Question 11

limited companies

Answer 11

has sperate legal identity from the owners the company has it sown assets separate from the owners

Question 12

features of limited companies

Answer 12

-capital can be raised by selling shares these shares are entitled to a vote on the board of directors they also get dividends paid fom profits
the more shares the more control they have
-have limited liability only lose what they invested
-are run by the bored of directors
-pay corporation tax

Question 13

forming a limited company has two different legal requirements

Answer 13

memorandum of association
article of association

Question 14

memorandum of association

Answer 14

name
name and address of the registered office
objectives of the company and the nuture of its activities
amount of capital needed to be raised

Question 15

article of association

Answer 15

-rights of shareholders depending on the type of share they hold
-procedure for appointing directors
-length of time directors should serve before re-election
-how often meetings are held

Question 16

certificate of incorporation

Answer 16

this allows it to trade as a limited company

Question 17

Ltd Private Limited company

Answer 17

end in LTD or limited
shares have to be transferred privately and can not be floated in the stock market
family and friends
directories tend to be shareholders

Question 18

ad of ltd

Answer 18

-limited liability
-more capital by issuing of shares
-less tax
-higher stats

Question 19

dis of ltd

Answer 19

-have to publish financial info
-setting up costs have to be met
-profit need to be shared
-takes time to transfer shares
-can raise less money then plc

Question 20

franchising

Answer 20

a business model in which a business(the franchisor) allows another
operator(the franchisee) to trade under their name. using a license for a fee

Question 21

franchisor provides a variety of services to its franchisees like

Answer 21

-it gives a franchise license for a product or service
-provides a recognized brand name that customers recognize and trust
-provide a start-up package that helps and advises about setting up the business
-provide materials like ingredients
-provide marketing support
-ongoing training
-more

Question 22

franchisee pays a variety of fees

Answer 22

–initial start up fee
-percentage of sales (use of brand name)
-training and other management fees

Question 23

ad to the franchisee

Question 24

dis to the franchisee

Question 25

ad to the franchior

Question 26

dis to the franchisor

Question 27

social enterprise

Answer 27

A business with main welfare o environmental objectives rather than maximizing profit.
they are referred to as non profit organizations

Question 28

what do social enterprise include

Answer 28

-have a clear and/or environmental mission
-generate most of the income from trade donations
-reinvest most of there profits
-not connected to the government
-more accountable and transparent

Question 29

forms

Answer 29

1)co-operatives they are owned and controlled by their members. members can purchase shares that entitle them to a vote at the AGM
2)worker co-op: these are businesses jointly owned by employees
3)mutual originations are owned by their customers rather than shareholders
4)charities that exist to raise money for various causes and draw attention to the needs of disadvantaged groups in society.

Question 30

lifestyle

Answer 30

aims to raise enough money and provide the flexibility needed to pay for a particular lifestyle

Question 31

features of lifestyle

Answer 31

small
personal interests/hobbies so its enjoyable \
running is less stressful
home based

Question 32

advantages of lifestyle

Answer 32

-allows them to sustain their chosen lifestyle
-have a personal interest

Question 33

online businesses

Answer 33

businesses that use the Global communications infrastructure of the internet as a trading base

Question 34

features of online

Answer 34

-low set-up cost
-no legal requirements
-via the Internet showing prices and general info
-payments online