Types Of Businesses

Question 1

Positives and negatives of a sole tradership

Answer 1

Positives
Owner receives all the profit
Owner makes all the decisions
Simple to set up and operate

Negatives
Unlimited liability

Question 2

Positives and negatives of a partnership

Answer 2

Positives
More ideas are brought to the business
Easy and inexpensive to set up
Requires seperate tax file number

Negatives
Decisions have to be passed through each partner
Disputes may occur
Unlimited liability

Question 3

Positives and negatives of a public listed companies

Answer 3

Positives
The risk is spread amongst the shareholders
Has limited liability
Easy to find investors (au stock exchange)

Negatives
Expensive to start up
Many legal requirements

Question 4

Positives and negatives of a private limited company

Answer 4

Positives
Limited liability
Seperate entity
Easy to raise finance - shares

Negatives
Expensive to start up and run
More complex to start up and operate

Question 5

Positives and negatives of a social enterprise

Answer 5

Positives
Easier to raise capital (gov incentives)
Easier to receive support from like minded individuals

Negatives
Profits made are reimbursed back into the firm

Question 6

Define business

Answer 6

Is the selling of goods and services to a target market. A business can also be known as a firm, enterprise or agency.

Question 7

Define hobby

Answer 7

Is a leisure activity that is performed in an individuals spare time for recreation or pleasure. If an individual doesn’t declare themselves as a business and is selling goods and services to the public they will receive fines.

Question 8

Define sole trader

Answer 8

Is a business structure which is owned by one individual person. The owner of it makes all the decisions.

Question 9

Define partnership

Answer 9

Is a business structure that involves 2-20 partners. It is easy and inexpensive to set up.

Question 10

Define private limited company

Answer 10

Is a business that contains a maximum of 50 shareholders. It has limited liability (shareholders personal assets are protected)

Question 11

Define public listed company

Answer 11

Is a company which is listed on the au stock exchange. Operated by directors and owned by shareholders.

Question 12

Define social enterprise

Answer 12

Is an organisation whose main goal is to give back to the community. The profits made by them are reimbursed back into the business.

Question 13

Define government business enterprise

Answer 13

Is a business that is owned and operated by the au gov. The enterprises main goal is to make a profit.