sole traders, partnerships, social enterprises & franchises

Question 1

define labor

Answer 1

people employed in a business used in production

Question 2

define unincorporated

Answer 2

business in which there is no legal difference between the owner and the business

Question 3

define incorporated

Answer 3

business that has separate legal identity from the owner

Question 4

define cooperative

Answer 4

organization in which all the people working own equal share of it

Question 5

define consumer cooperative

Answer 5

cooperative that’s owned by consumers

Question 6

define worker cooperative

Answer 6

cooperative that’s owned by workers

Question 7

define unlimited liability

Answer 7

owner of the business is liable for all business debts

Question 8

define limited liability

Answer 8

business owner is only liable for the original amount invested

Question 9

define entrepreneur

Answer 9

owner of a business who had invested money into it

Question 10

list roles of an entrepreneur

Answer 10

to innovate, to make key decisions, to take risks

Question 11

define sole trader

Answer 11

a business that’s owned by a single person

Question 12

list advantages of sole trader

Answer 12

owner keeps all the profit, simple to set up, more flexible

Question 13

list disadvantages of sole trader

Answer 13

struggle to raise finance, long hours, very hard work, unlimited liability, no continuity

Question 14

define partnership

Answer 14

business owned by 2 or more people

Question 15

list advantages of partnership

Answer 15

the job of running the business is shared, financial information not public, easy to set up, more startup capital

Question 16

list disadvantages of partnership

Answer 16

possible conflicts, small business, unlimited liability, shared profits

Question 17

define limited partnership

Answer 17

partnership where partners have limited liability

Question 18

define franchise

Answer 18

a business with an owner franchisor and a trader franchisee

Question 19

list advantages of franchise to franchisor

Answer 19

fast and cheap growth, franchisees take some risk, franchisees are more motivated than employee

Question 20

list disadvantages of franchise to franchisor

Answer 20

shared profits, poor franchisees can damage reputation, high cost of support

Question 21

list advantages of franchise to franchisee

Answer 21

less risk, back up support is given, predictable set up costs

Question 22

list disadvantages of franchise to franchisee

Answer 22

shared profits, strict contract, lack of independence, expensive method to start a business

Question 23

define social enterprise

Answer 23

non-profitable business with the main aim to improve social and environmental well-being