types of businesses

Question 1

sole trader

Answer 1

a sole trader is an individual operating as the singular person responsible for all aspects of the business. it gives the owner all decision making power. reasons for being a sole trader. simple set up, low costs, full control. negatives include unlimited liability

Question 2

partnership

Answer 2

a partnership structure that invoves a 2-20 people who carry on a business together. these people are still personally liable but share control.

Question 3

private limited company

Answer 3

a company who’s shares are sold privately and shares can only be traded with permission of other share holders, this means it is not listed on the stock exchange. as it is a seperate legal identity profits earned belong “the company”

Question 4

public listed company

Answer 4

the company is listed on the stock exchange and its shares can be traded by the general public. the shareholders give money to the business and in exchange own a share of the business and gets a percentage of all profits through dividends

Question 5

social enterprise

Answer 5

an enterprise focused on generating a profit to achieve an primary social objectives, with the profits being reinvested back into the community.

Question 6

government business enterprise

Answer 6

an organisation that undertakes commercial activity on behalf of the government. they are owned by the government but are run like any other corporation that aims to make a profit.