Pros and cons

Question 1

What are the pros of a partnership?

Answer 1

Pros: Different opinions, workload is lighter since it is shared, can take breaks and holidays more frequently , shared capital

Question 2

Pros of a sole trader

Answer 2

Keep all profit, full control, Flexibility (working hours, stocked goods)

Question 3

Pros of Private Limited Companies

Answer 3

Limited liability, continuity, Legal identity, Ease of buying and selling shares.

Question 4

Cons of a sole trader

Answer 4

Raising finance, long work hours, unlimited liability

Question 5

What are the cons of a partnership?

Answer 5

Profits have to be shared, Don’t have full control of business, lack of job security, conflicts of interest

Question 6

Cons of Private Limited Company

Answer 6

Corporation tax, not as much revenue as shares cannot be sold to the public, legal formalities are consuming, Cost of business.

Question 7

Pros of a Public Limited Company

Answer 7

Limited liability, Seperate legal identity, continuity, easy to buy and sell shares, access to substantial capital, benefits from economies of scale

Question 8

Cons of a public limited company

Answer 8

Risk of take over, share prices subject to inflation, must publish annual reports, conflicts of interest between shareholders and board of directors

Question 9

Pros of a social enterprise

Answer 9

Better reputation, strong brand name, benefits society, easy marketing, more productive employees

Question 10

Cons of a social enterprise

Answer 10

Strict regulations, can be costly, more expensive, have to compete with less ethical businesses

Question 11

Pros of a cooperative

Answer 11

Buying in bulk, working together to solve problems and take decisions

Question 12

Cons of a cooperative

Answer 12

Poor management skills, unless pro managers are hired, Capital Shortages, Slow decision making, harder to raise capital than a PLC

Question 13

Pros of Joint ventures

Answer 13

Different companies have different strengths, They could have major markets in other countries, Sharing costs and resources

Question 14

Cons of a joint venture

Answer 14

Style of management and workplace culture can be different, Buisness failure of one partner can jeopardise the whole project, Errors and mistakes maybe put on one party even if they didn’t make those mistakes

Question 15

No of employees as a measure of business size, pros and cons

Answer 15

Accurate measure as bigger busiesses can handle the costs of a larger workforce, large businesses may be highly automated and only need a few workes

Question 16

Revenue as a measure of business size, pros and cons.

Answer 16

Good at comparing size of firms in the same industry, Less effective when comparing firms in different industries.

Question 17

Market capitalisation as a measurement of business size, pros and cons.

Answer 17

Can be used for a business that has shares quoted on the stock exchange, not stable as the stock market isn’t stable

Question 18

Market share as a measurement of business size, pros and cons.

Answer 18

Shows the size of the company compared to its industry, industry could be niche so the business could actually be small

Question 19

Capital employed as a measurement of business size, pros and cons.

Answer 19

Larger businesses will have a greater amount of capital employeed, a small business may have alot invested into it, two firms can be the same size but have different amount of capital employed