Unit 3

Question 1

Entrepreneur

Answer 1

People who set up businesses are called entrepreneurs. They are the owners and without them businesses would not exist in private sector.

Question 2

Roles of entrepreneurs

Answer 2

1. innovators
2. Organisers
3. Risk takers
4. Decision makers

Question 3

Innovators

Answer 3

Someone who introduces changes and new ideas

Question 4

Labour

Answer 4

People employed in a business/ used in production

Question 5

2 types of businesses according to legal form they take

Answer 5

1. Unincorporated

2. Incorporated

Question 6

Unincorporated Businesses

Answer 6

Businesses where there is no legal difference between owner and the business

Question 7

Incorporated Business

Answer 7

Business that has a separate legal identity from that of its owner

Question 8

Sole Trader/Sole Proprietor

Answer 8

Business owned by a single person

It can employ any number of people

Question 9

Unlimited liability

Answer 9

Owner of a business is personally liable for all business debts
(If the business fails the owner(s) can lose more money than was originally invested.)

Question 10

Partnership

Answer 10

Businesses owned by between 2 and 20 people

Question 11

Deed of partnership

Answer 11

Binding legal document that states the formal rights or partners.
It states-
How much capital each partner will contribute
How profits (and losses) will be shared among the partners
The procedure of ending the partnership
How much control each partner has
Rules for taking on new partners.

Question 12

Limited Partnership

Answer 12

Partnership where some partners contribute capital and enjoy a share of the profit but do not take part in the running of the businesses

Question 13

Limited Liability

Answer 13

Business owner is only liable for the original amount of money invested in the business

Question 14

Audits

Answer 14

Official examination of a company’s financial records in order to check that they are correct.

Question 15

Franchise

Answer 15

structure in which a business ( the franchisor) allows another operator ( the franchisee) to trade under their name.

Question 16

merchandise

Answer 16

goods that are being sold.

Question 17

Social enterprise

Answer 17

business that aims to improve human or environmental well-being, charities for example.

Question 18

cooperative

Answer 18

company, factory or organization in which all the people working there own an equal share of it.

Question 19

Consumer cooperative

Answer 19

cooperative that is owned by its customers

Question 20

retail cooperative

Answer 20

cooperative of retail members, who often work together to assert their purchasing power.

Question 21

Worker cooperative

Answer 21

cooperative that is owned by its employees.

Question 22

charities

Answer 22

organizations that give money, goods or help people who are poor, sick or in need.