Types of Businesses

Question 1

4 Types of Business

Answer 1

1. Service
2. Merchandising
3. Manufacturing
4. Not-for-profit

Question 2

Service

Answer 2

• Intangible (cannot physically hold in your hand
• Ex: Molly Maid, nail salon, tutoring

Question 3

Merchandising

Answer 3

• Buys products at a low price and resells at a higher price
• Can sell to individuals or businesses
• Tangible
• Some businesses are part merchandising part service
• Ex: Retailers: Best Buy, Apple

Question 4

Manufacturing

Answer 4

• Business that produces or makes something
• Buys raw materials and uses labor and equipment to make a finished product for merchandisers
• Ex: Laptops, Toyota

Question 5

Not-for-profit

Answer 5

• Purpose is not to make money
• Purpose is to help society
• Ex: Charities (ie Red Cross)

Question 6

3 Forms of Business Ownership

Answer 6

1. Sole-proprietorship
2. Partnership
3. Limited Company/ corporation

Question 7

Sole-proprietorship

Answer 7

• One owner
• May work alone or other may work for them
• Most common form of business
• Ex: Landscaper
• Unlimited liability

Question 8

Partnership

Answer 8

• More than 1 owner

Question 9

2 Types of Partnership

Answer 9

1. Limited Partnership
2. General Partnership

Question 10

Limited Partnership

Answer 10

• One partner is a limited/ silent partner who is legally responsible for losses based on the amount of their investment

Question 11

General Partnership

Answer 11

• Each partner shares the administration, losses and profits of the organization

Question 12

Limited Company/Corporation

Answer 12

• Business that is owned by shareholders
• Some corporations have thousands of shareholders
• Considered a legal person or entity (business can be sued, not shareholders)
• Almost all business operations are corporations Ex. Nike
• Dividends: Payments made to shareholders by the company