Parts to a business Business

Question 1

What are stakeholders?

Answer 1

Anyone who has an interest in the business

Question 2

How much influence to stakeholders have over the business?

Answer 2

All stakeholders have some influence

Depending on the type of stakeholder and business, depends on how much influence this is

Question 3

What are some advantages to being a sole trader/proprietor

Answer 3

They are easy to set up
Easy to run
Flexible as you can make your own choices on when to work
Can take expenses off tax
Only the inland revenue and customs and excise know your finances

Question 4

What are some disadvantages to being a sole trader/proprietor

Answer 4

You have unlimited liability
Lack of continuity as when the owner stops the business stops
Business will suffer if they can’t work
Have to work a lot to keep the business going
Difficult to raise capital

Question 5

What are the advantages of being a partnership?

Answer 5

They are easily formed
the debts are spread among the partners
more capital can be raised then a sole trader
workload, ideas and decisions are shared
different partners have different skills they can bring to the business

Question 6

What are the disadvantages to being a partnership?

Answer 6

Partners have unlimited liability
Harmful actions/ mistakes of one partner are sorted out by the others
Profits have to be shared
you have less control as you’re not the only boss
partners can disagree about decisions
Different partners can have different work ethics

Question 7

What are sleeping partners?

Answer 7

They invest money into a business but do not take any part in decision-making they purely fund it or pay off the debt

Question 8

What are social enterprises?

Answer 8

An organisation using commercial strategy to help the public and environment
make money by selling goods and services
put any profit back into own or local businesses

Question 9

What is a limited company?

Answer 9

two types of limited company: one private and one public

they both have limited liability, shareholders and are set up in the same way

Question 10

What do private limited companies (Ltd) have that public limited companies (Plc) don’t have?

Answer 10

They must know all the shareholders, can have 2 to 50 of them. Are usually smaller businesses with less money involved in them

Question 11

What a public limited companies (Plc) have a private limited companies (Ltd) don’t?

Answer 11

They are usually larger organisations
the shares are sold to public on the stock exchange
has to have more than £50,000 worth of shares
have a majority shareholder with more than 51% of the shares

Question 12

What are the advantages of a private limited company (Ltd)?

Answer 12

Shares to raise capital
separate legal identity from owners
business can continue even if one of the shareholders wants to sell their shares
is not affected by the death of shareholder

Question 13

What are the advantages of a public limited company (plc)?

Answer 13

Can raise lots of the finance by selling shares

easy to raise extra finance in a short space of time

Question 14

What are the disadvantages of a private limited company (LTD)

Answer 14

Hard to raise extra capital
a dividend has to be given to the shareholders each year if the company makes a profit
financial information is available for anyone to see
shares can only be sold to people known to the company
can be costly and time-consuming to register and set up

Question 15

What are the disadvantages to a public limited company (plc)?

Answer 15

Dividends have to be paid to shareholders each year as a share of the profits
shareholders with a few numbers of shares will have little say in how business is run
is expensive and requires a lot of paperwork to set up
financial information is available to public
takeover risk- anyone buying shares on the stock exchange can take the business over if they get 51% or more

Question 16

What are the stages of setting up a limited company?

Answer 16

1) come up with business idea and name
2) get company register, apply to registrar at company house
3) draw up memorandum of association
4) and articles of association
5) send articles and memorandum to company house
6) companies registrar issues a certificate of incorporation

Question 17

What is a multinational company?

Answer 17

A company which operates in several countries across the world

Question 18

What are the benefits of a multinational company?

Answer 18

The manufacturing can be spread across the world and be placed with market
economies of scale gained by doing
things in bulk
goods can be produced in places where the costs are lower

Question 19

What are the drawbacks of a multinational company?

Answer 19

Communication problems are caused by having locations in different countries
different legal requirements are needed for different countries
transport costs are high
exchange rates fluctuate in different countries

Question 20

What is a cooperative?

Answer 20

A business that is owned by its members
members are usually employees in the business
each member holds a share in the business

Question 21

What are the advantages of a corporative

Answer 21

Employees are more stable, caring and responsible
they get greater job satisfaction
More responsible to customers and community of the business

Question 22

What are the disadvantages of a cooperative?

Answer 22

Possible conflict
Takes time to make decisions 
Participation of members is required for success 
Record keeping is necessary 
Finance is provided by the members

Question 23

What are the types of business growth?

Answer 23

1) internal growth
2) external growth
3) integration

Question 24

What are the four main ways of external growth?

Answer 24

Merger
take over
Acquisition
joint-venture

Question 25

What are the two types of integration?

Answer 25

Vertical integration and horizontal integration

Question 26

Why might a business relocate?

Answer 26

Tradition
Infrastructure
Labour
Cost
Climate
Access to market
Availability of raw materials
Type of product / service

Question 27

What is an enterprise?

Answer 27

Describes the skills and personality of a person that makes them succeed in the business

Question 28

What is an entrepreneur

Answer 28

A person who takes a risk of starting and running a business

Question 29

What are the stages of recruitment?

Answer 29

Identify a job vacancy
write job description and person specification
advertise the vacancy
receive application forms
shortlist applicants
interview applicants
offer the successful applicant the job and contact the unsuccessful candidates
sort the contract of employment with the successful candidate

Question 30

How is the business most likely to encourage applicants for a post?

Answer 30

Publishing job adverts

Question 31

Where is the details of skills and qualities required for post usually found?

Answer 31

Person specification

Question 32

Where are the details of employee tasks for a post usually found

Answer 32

Job description

Question 33

Where would you usually find a summary of the work history of a prospective employee?

Answer 33

Their CV

Question 34

What department is responsible for recruitment and selection of new employees

Answer 34

Human Resources (HR)