Types Of Business 🔫

Question 1

Public sector

Answer 1

Is part of the economic that is funded(financed) by the government through tax payers and is control and operated by the government or its agents eg: public schools, police

Question 2

Features of a public sector

Answer 2

• aims to proved a service at a lowest possible price
• uses profit to improve the efficiency of the firm or to benefits all citizens
• it’s funded by the government through taxation

Question 3

Private sector

Answer 3

That part of the economy that is funded by privater individuals and is therefore owned or operated by private business or firm.

Question 4

Features of private sector

Answer 4

• aims to make a profit
• the business is funded by the owners
• there is little or no government intervention or control
• owner are free to make their own decisions as long as these decisions are not to the laws of the land

Question 5

Reason for establishing a business

Answer 5

• to be your own boss
• to be financially independent
• to create goods
• to be more creative
• to make a profit

Question 6

Functions of a business

Answer 6

• to create jobs
  -to create a business to contribute to economy growth. Increase the amount of good & services
  -

Question 7

Economic growth

Answer 7

It the increase in the total real output of goods and services in an economy overtime

Question 8

Sole trader/ proprietorships

Answer 8

Is a business in which one person proves the permanent finances and has full control of the business and is able to keep all the profits

Question 9

Features of sole-trader

Answer 9

• he or she enjoys all profits and bears all risk
• he/she has personal contact with the client(costumers).
• he/she manages the business, but Amy have the service of family members
• capital is limited since the savings of the owner funds the business

Question 10

Advantages of sole-trader

Answer 10

• Owner keeps all profits
• easy to set up, no legal formalities
• able to choose times and pattern of working
• able to establish close personal relationships with costumers and staff if there is any

Question 11

Disadvantage of some-trader

Answer 11

• long hours often nessiary to make money
• lack of continuity/ as the business does not have a separate legal status when the owner dies the business dies too.
• unlimited liability/if the business fails even the personal possession of the owner will be sold in order to pay off the debts of the business if needed to

Question 12

Partner ship

Answer 12

Is a business form by two- twenty people ( partners) to carry on a business together with shared capital investments and usually shared responsibilities.

Question 13

Features of a partnership

Answer 13

• capital is provided by partners as agreed

- profits are shared equally or as stated in the partnership deed

Question 14

Formation of a partnership

Answer 14

When a number of persons want to form a partnership a written agreement known as that PARTNERSHIP DEED should be drawn out.

Question 15

Advantage of partnership

Answer 15

• Additional capital is injected by each partner
• work load is shared among partners thus maybe able to take vacation and enjoy more lager time
• there is better decisions making due to shared knowledge and expertise

Question 16

Disadvantage of partnerships

Answer 16

• all partners stand to lose if one partner makes a bad mistake
• decisions making may take longer and arguments may arise
• there can be difficulties of management when partners disagree

Question 17

Co-operative

Answer 17

Are businesses that are formed and operated by their members.
There is democratic control that is one person one vote. Membership is open to constituents.

Question 18

Characteristics of co-operatives

Answer 18

• they are voluntary, no-profit making organizations engaged in retail or other financial activities.
• They are managed and controlled by their members
• the members are also the clients.

Question 19

Types of co-operatives

Answer 19

• financial
• agriculture
• consumer
• service

Question 20

Advantage of of-operatives

Answer 20

> members pool their own resources
members are the owners
there is shared decisions making.
all profits are shared among the membership

Question 21

Disadvantage of co-operatives

Answer 21

> the membership may not have the expertise necessary to build the organization
decision making is slow and therefore clients may lose out opportunities.

Question 22

Incorporated

Answer 22

The business has a separate legal identity from the owner

Question 23

Companies

Answer 23

A company is a business entity hat has been incooperated that is the company has separate legal identity that from the owner
This means that the business is able to enter contracts make any legal claims and face and legal claims that are made against it

Question 24

Name two types of companies

Answer 24

> public limited

>private limited

Question 25

Private limited

Answer 25

Is an incooprated business organization consisting of 2-50 members who’s aim is to make profit. Membership is restricted to family and friends

Question 26

Managements of private limited

Answer 26

Owner manage this type of business or may oppoint special personal the membership must approve and disposal of shears and usually sales of share are restricted to the membership.

Question 27

Characteristics of private limited company

Answer 27

> capital is obtain from private individuals financial institutions government agency or retain profits > limited liability,shareholders, have limited liabilities > company must be registered with the register of companies >membership is between 2- 50 persons > word limited must be included in the name

Question 28

Advantages private limited company

Answer 28

> a large capital base than a sole trader or partnership > has continuously and thus can easily obtain loans >company has a separate legal identity from the ownership

Question 29

Disadvantage private limited company

Answer 29

> capital is limited since the membership is limited to 50 > company must file its finance reports with the registers of companies >selling of shares is restricted to the private grouping

Question 30

Public limited company

Answer 30

Is also known as a joint-stock is an incorporated company that offers shares to the public .

Question 31

Disadvantage of public C.L

Answer 31

> the accounts have to be made public > the legal requirements maybe costly and time consuming > since it’s a larger size, decision making takes longer

Question 32

Management public c.l

Answer 32

Board of directors which is elected by the shareholders at the annual general meeting manages the public limited company.

Question 33

Characteristics of Public C.L

Answer 33

> must be at least 1 shareholder with no limits on the maximum number of shareholders > share are traded openly in the stock market > public limited company must be incorporated

Question 34

Franchises

Answer 34

Is a business entity where a franchisor (owner of business) grant a franchisee(purchasers of franchise) a license to use the established brand and reproduce the frachisors product