UB

Question 1

Quaternary

Answer 1

Sector of industry that provides IT and knowledge based services

Question 2

Similarities between PLC and LTD x5

Answer 2

Limited liability
Hold an AGM
Owned by shareholders
Controlled by a board of directors
Complete articles and memorandum of association.

Question 3

Differences between PLC and LTD x3

Answer 3

LTD- 1 shareholder, 1 director
PLC- 2 shareholders, 2 directors and 1 company secretary
LTD- no min start up capital
PLC- £50,000 start up capital
LTD- invitation
PLC- stock exchange

Question 4

Private Limited Company + x4

Answer 4

Limited liability
No risk of takeover
Don’t have to disclose info at the end of the year
Owners keep control

Question 5

Private Limited Company - x4

Answer 5

Legal set up is expensive
Harder to control/motivate workers who do not hold shares
Profits have to be shared to all shareholders who receive a dividend.
Limited capital as they can’t advertise on stock market

Question 6

Public Limited Company + x4

Answer 6

Economies of scale
Easier to finance on stock exchange
Limited liability
Increased capital can grow and diversify

Question 7

Public Limited Company - x4

Answer 7

Subject to hostile takeover
Disclosing financial info at the end of the year
Disagreements over how the company is run
Must be registered with registrar of companies

Question 8

Multi National Company

Answer 8

When a business owns or controls production or service facilities in more than one country

Question 9

HOME Country + x4

Answer 9

Cheaper raw materials
Avoid certain legal requirements
Closer to suppliers
Economies of scale

Question 10

HOME Country - x4

Answer 10

Differing languages can hinder communication
Time differences can create communication barriers
Legislation differences restrict decision making
Exchange rates affect purchases

Question 11

HOST Country +

Answer 11

New jobs to the area
Add to infrastructure
Skills learned can create new businesses
Improve standard living

Question 12

HOST Country - x4

Answer 12

Very powerful and can influence government
Exploit low paid workers
Profits go back to home country
Force local firms out of business

Question 13

Franchisee

Answer 13

The individual taking on a business

Question 14

Franchiser

Answer 14

The business who’s name is being used

Question 15

Franchise

Answer 15

When a franchiser grant permission to a franchisee to sell or distribute their companies goods or services in a certain area.

Question 16

Franchisee + x4

Answer 16

Little advertisement in the first year as franchiser could’ve done it
Risk of business failure is reduced
Franchiser may carry out training and provide fittings
Start up price will be known in advance

Question 17

Franchisee - x3

Answer 17

High start up fees- royalty payments, % of profits
Reputation is dependent on other branches and franchiser
Follow strict rules with prices and products which stifles franchisee initiative

Question 18

Franchiser + x4

Answer 18

Low risk as franchisee invests capital
Allows them to increase market share
Strengthens brand name
Benefit from franchisees ideas

Question 19

Franchiser - x3

Answer 19

Lose some reputation if the franchisee isn’t so good, can tarnish brand
Only share of profit received- not all to franchiser
Lose control- franchisee can change and adapt things which may change experience to consumer.