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| Question | Answer |
|
Gary the Chimney Sweep
What type of business ownership does he have?
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A sole trader |
| Name three advantages of being a Sole Trader | 1. Can be set up easily 2. All the profits go to the owner 3. Sole trader is responsible for all the decision making |
| Name three disadvantages of being a Sole Trader | 1. Limited capital to start the business 2. Unlimited liability - responsible for all the debts of the business 3. A lack of multiple skills |
| What type of business ownership does this group of solicitors have? | Limited Liability Partnership |
| What type of business ownership does this group of accountants have? | Partnership |
| Name three advantages of partnership owners | 1. More than one person investing in business so more start-up capital 2. Skills expertise available from other partners 3. Share work around if you're ill |
| Name three disadvantages of partnership owners | 1. Decision making is shared which means they might take longer to make 2. Unlimited liability if not set up as an LLP 3. Profits shared according to partnership agreement upon set up |
| List the points included in a Deed of Partnership or a Partnership Agreement | The capital contributed by each partner The ratio in which profits/losses are shared The rate of interest to paid on capital Salaries to be paid to partners The role of each partner in the business Arrangements for admission of new partners Procedures for partners retiring or dying |
| What type of business ownership do these builders have? | Private Limited Company |
| What type of business ownership does this builders merchant have? | Public Limited Company |
| Name three advantages of Private Limited Companies (Ltd) or Public Limited Company (plc) | 1. Shareholders have limited liability 2. Easier to raise capital through share issue 3. Easier to raise finance from banks 4. Operate on a large scale 5. Suppliers feel more confident 6. Company name is protected by law |
| Name three disadvantages of Private Limited Companies (Ltd) or Public Limited Companies (plc) | 1. Set-up and running costs can be expensive 2. Decisions can be slow 3. Get too large and become ineffective 4. Employees and shareholders are distant 5. Affairs are public 6. Business controlled by Companies Acts |
| If a business wants to operate as a limited company, what legal requirements do they need to meet? | Register their business with the Registrar of Companies by completing: 1. Memorandum of Association (what the company is and nature of the business) 2. Articles of Association (sets out how the business will be run internally) |
| What type of ownership does this business have? | Franchise |
| Name three advantages of a franchise | 1. Setting up a business with an already established success strategy 2. Training provided by the franchisor 3. Marketing and promotion provided by the franchisor |
| Name three disadvantages of a franchise | 1. Expensive to buy into 2. Not able to make as many decisions as a sole trader 3. Have to share a percentage of profits with the franchisor |
| What type of business is does this organisation have? | Voluntary Charitable Not-for-profit organisation |
| What does the term 'Not-for-profit' mean? | This type of business does not have profit as an aim for their business - they only make enough to cover their costs |
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