Introduction To Business Business Sectors And Types Of Business

Question 1

Distinguish between a primary,secondary and tertiary sector organisation

Answer 1

Primary- makes direct use of natural resources
Secondary-role of manufacturing
Tertiary-service sector

Question 2

Distinguish between private public and third sector organisations

Answer 2

Private sector is ran by individuals for profit (not state controlled)

Public sector government and government controlled enterprise like the NHS

Third sector charities and voluntary groups

Question 3

Local markets

Answer 3

Targets customers within a radius around a physical location

Question 4

National market

Answer 4

Sale of a product or service around the country

Question 5

Global market

Answer 5

Goods and services traded worldwide

Question 6

National business

Answer 6

Operates within the boarders of a country

Question 7

Multinational business

Answer 7

Operates in multiple countries

Question 8

Identify the three sectors of economic activity

Answer 8

Raw materials (primary)
Manufacturing (secondary)
Service industries

Question 9

State an example of a business in each sector

Answer 9

Primary = farming 
Manufacturing = building 
Service = hairdresser

Question 10

Advantage of being a soletrader

Answer 10

Can chose hours of work

Question 11

Disadvantage of a soletrader

Answer 11

Unlimited liability

Question 12

Explain why continuity is a disadvantage for soletrader

Answer 12

When a soletrader dies or retires the business is likely to end

Question 13

Explain what is meant by a partnership

Answer 13

Two or more people owning a business working together

Question 14

Disadvantage of partnerships

Answer 14

Potential disagreements

Question 15

Advantage of partnerships

Answer 15

More skills and ideas in a business

Question 16

Explain why financial privacy is an advantage for partnerships

Answer 16

Their finances cant be viewed on company house.other businesses cant see it

Question 17

Explain what is meant by a limited liability partnership

Answer 17

The indictable of the partnership have limited liability this means the Individual partners are not liable for the debts of the entire limited liability partnership

Question 18

Limited liability

Answer 18

Business owners debts are restricted to what they put into the business

Question 19

Unlimited liability

Answer 19

The business owners is personally responsible for any losses the business makes

Question 20

Private limited company

Answer 20

Has limited liability

LTD in name owned by shareholders

Question 21

Explain why publishing company accounts ,at be a disadvantage for private limited companies

Answer 21

Must be register of company house

Question 22

Explain why borrowing can be easier for private limited companies than sole traders and partnerships

Answer 22

Shares in the business can be sold to raise money

Question 23

Identify one other advantage and one other disadvantage of operating as a private limited company

Answer 23

An advantage is limited liability

A disadvantage is legal set up costs are expensive

Question 24

Explain what is meant by a public limited company

Answer 24

Managed by directors 
Owned by shareholders 
Can offer shares to public 
Listed on stock market
More open and public than LTD

Question 25

Identify one advantage and one disadvantage of operating as a public limited company

Answer 25

Anyone can buy a share

Public display of finance

Question 26

Why a takeover may represent a disadvantage for public limited companies

Answer 26

Cannot control who buys shares