Theme 1.5 Entrepreneurs and Leaders

Question 1

4 advantages of a partnership?

Answer 1

More capital invested
Can share ideas
More partners add more skills
Financial information is private

Question 2

4 disadvantages of a partnership?

Answer 2

Unlimited liability
Disagreements
Profit is shared
Slower decision making

Question 3

Incorporated meaning?

Answer 3

The business shad a seperate legal identity from the owner, which is why they have limited liability

Question 4

6 advantages of a private limited company?

Answer 4

Can raise capital by selling shares
Limited liability
Incorporated - shareholders can’t be sued
Keep control of the business
No chance of takeover without shareholder agreement
Continuity

Question 5

4 disadvantages of an LTD?

Answer 5

Harder to raise capital as can only sell to friends and family
Have to pay dividends
More expensive to set up
Must publish accounts every year

Question 6

5 advantages of a public limited company?

Answer 6

Limited liability
Easy to raise capital
Benefit from EOS
Easier to raise finance from banks as seen as less risk
Can employ specialist staff

Question 7

7 disadvantages of a PLC?

Answer 7

Expensive to set up

Anyone can buy shares (untrustworthy)

Harder to deal with customers on a personal level due to the size

The way they operate is controlled by various Company Acts, which aim to protect shareholders

Owners do not control the day to day decisions in the business

Focus on short term profits

Question 8

5 advantages of a sole trader?

Answer 8

Flexible working hours
Keep 100% of profits
Make all decisions
Easy/Cheap to set up
Able to work in an area they have an interest in

Question 9

6 disadvantages of a sole trader?

Answer 9

Unlimited liability
Stress
Limited investment/capital/skills
Increased workload (long working hours)
Could be earning less than previous job
Lack of continuity

Question 10

What is a deed of partnership? (4)

Answer 10

A document/contract setting out:

Name and roles of each partner

Info on the way the business operates

How much 💰 each partner has contributed to the business

How profits and losses will be shared amongst partners

Question 11

What if there is no deed of partnership?

Answer 11

The profit is equally shared amongst partners no matter how much they have invested