Intrduction To Business - Types of Business

Question 1

what is a sole trader

Answer 1

a sole trader is a business which has one owner. they do their tax returns and have unlimited liability

Question 2

what is a partnership

Answer 2

a partnership is a business involving 2-100 people, do their own tax returns and have unlimited liability

Question 3

why do people do partnerships (3 things)

Answer 3

1. lower workload
2. increased specialisation
3. more ideas

Question 4

define a sleeping partner

Answer 4

a sleeping partner is someone who invests money into the business but takes no part in running the business

Question 5

what is a private limited company (LTD)

Answer 5

an LTD is a company owned by shareholders who pay directors to run the company and have limited liability

Question 6

what is a public limited company (PLC)

Answer 6

a PLC is where the company is run by members of the general public who pay directors to run the company and have limited liability

Question 7

what is limited liability

Answer 7

limited liability is where the owners only loose the money that they invested into the business if it fails

Question 8

what is unlimited liability

Answer 8

unlimited liability is where business owners can loose personal belongings by having them taken off them to pay for depts. if the business fails

Question 9

What is a franchise (2 things)

Answer 9

A franchise is where you pay a company a royalty fee to trade under a business name
You also have to pay the business a percentage of your revenue