What are the main advantages of setting up a partnership?

Shared decision making, Increased capital invested, Increased specialisation

Partners may have disagreements, Limited finance

Profits have to be shared between partners, No continuity of existence

What are the main disadvantages of setting up a partnership?

Unlimited liability, Profits have to be shared between partners, No continuity of existence, Partners may have disagreements

Increased specialisation, Easy to set up – few legal requirements

What is a limited company?

A limited company, is incorporated, which means it can sue or own assets in its own right. Personal assets are separate from company assets and therefore protected from company debts.

A limited company, is incorporated, which means it can sue or own assets in its own right. Personal assets are NOT separate from company assets and therefore NOT protected from company debts.

A company that sell shares publicly on the stock market

A company that sells shares privately by inviting potential investors

A company that sell shares publicly on the stock market

What are the advantages of setting up an LTD?

Ownership and control are closely connected, board of directors are often main shareholders, Decisions can be taken more quickly, Limited liability

Loss of individual control, More complicated to set up - legal formalities

What are the disadvantages of setting up an LTD?

Loss of individual control, More complicated to set up - legal formalities

Ownership and control are closely connected, board of directors are often main shareholders, Decisions can be taken more quickly, Limited liability

What are the advantages of setting up an PLC?

Raise large amount of capital from share issue, Benefit from economies of scale, e.g. bulk buying, cheaper borrowing, Limited liability

Become too large resulting in poor labour relations, Conflict of interest between shareholders and the Board of Directors, Possibility of takeover or merger because shares can be bought by anyone

What are the disadvantages of setting up an PLC?

Become too large resulting in poor labour relations, Conflict of interest between shareholders and the Board of Directors, Possibility of takeover or merger because shares can be bought by anyone

Raise large amount of capital from share issue, Benefit from economies of scale, e.g. bulk buying, cheaper borrowing, Limited liability

A franchise is an agreement or license between two parties which gives a person or group of people (the franchisee) the rights to market a product or service using the trademark of another business (the franchisor)

A franchise is an agreement or license between two parties which gives a person or group of people (the franchisee) the rights to own and then market a product or service using the trademark of another business (the franchisor)

What must the franchisee do?

The franchisee must operate in the same way as the franchiser, to produce and sell the goods of the franchiser. The franchisee pays the franchiser for this right

The franchisee can operate in the same way as the franchiser, to produce and sell the goods of the franchiser.

How does the franchisee get?

A recognised brand name, Advertising which covers all the franchisees in an area, Training to start the business, Equipment such as shop fittings or specialist machinery, Materials to use in the production of a good or service

A location, some advertising at the beginning of the contract, some support and training, but the franchisee has creative freedom to do what they want

How does the franchiser make a profit?

From the initial investment made by the franchisee

From the initial investment made by the franchisee and a percentage of the monthly sales made

What are the advantages for the franchisee of being in a franchise?

Established name, Support of Franchiser and training, supplies provided, marketing

Lack of total control, no creative freedom, cannot call it their own business

What are the disadvantages for the franchisee of being in a franchise?

Lack of total control, no creative freedom, cannot call it their own business

Established name, Support of Franchiser and training, supplies provided, marketing

What are the advantages for the franchiser of being in a franchise?

Quick way to grow, Royalties from Franchisee

Risk of reputation from unsuitable franchisee

1. Business Ownership Types

Quiz

•

Other

•

9th - 12th Grade

•

Practice Problem

•

Medium

Keezir Ali

Used 197+ times

FREE Resource

29 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the definition of UNLIMITED LIABILITY?

A legal obligation on the owners of a business to settle all debts of the business. In law there is no distinction between the assets and debts of the business and the personal assets and debts of the owner.

Owners are not fully liable for the company’s debts : UNLIMITED LIABILITY

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a sole trader?

A type of business that is owned by just one person.

A business owned by two or more people.

An agreement or license between two parties which gives a person or group of people the rights to market a product or service using the trademark of another business.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Can a sole trader have other people working for them?

Yes

No

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What kind of liability does a sole trader have?

Limited Liability

Unlimited Liability

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What are the main advantages of being a sole trader?

Own boss, Greater opportunity for flexible working, Keep all profits

Unlimited liability, Time off/holidays

No one to share decision making, No continuity of existence

Limited finance

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What are the main disadvantages of being a sole trader?

Own boss

Unlimited liability, Time off/holidays, No one to share decision making, No continuity of existence, Limited finance

Total control

Keep all profits

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a partnership?

A type of business that is owned by just one person.

A business owned by two or more people.

An agreement or license between two parties which gives a person or group of people the rights to market a product or service using the trademark of another business.

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1. Business Ownership Types

29 questions

What is the definition of UNLIMITED LIABILITY?

What is a sole trader?

Can a sole trader have other people working for them?

What kind of liability does a sole trader have?

What are the main advantages of being a sole trader?

What are the main disadvantages of being a sole trader?

What is a partnership?

How many people could own a partnership?

Can a partnership have other people working for them?

What is the name of the document that lays out rules for running and dissolution of the partnership (e.g. sharing of profits)?

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