Sole Traders, Partnerships and Franchises

Which is the simplest form of business organization?

• sole proprietorship

• partnership

• franchise

• none of the above

A sole trader has one owner but can employ any number of people.

• true

• false

• undecided

Sole traders can be found in ALL the sectors of the economy.

• true

• false

Examples of sole traders in the primary sector include

• farmers and fishermen

• builders and manufacturers

• web designers and hairdressers

• taxi drivers and gardener

Examples of sole trader businesses in the tertiary sector includes

• manufacturers and small builders

• farmers and fishermen

• miners and footballers

• hairdressers and teachers

One feature of a limited partnership includes

• at least one sleeping partner

• every partner is involved in the running of the business.

• every partner has unlimited liability

One disadvantage of sole proprietorship includes

• owner keeps all the profit

• owner has complete control

• no legal requirements to set up

• personalized services to customers

• owners have unlimited liability

Features of partnership deed includes All but the following.

• how much capital each partner will contribute

• skills of partners spouses

• how profits or losses will be shared among the partners

• the procedure for ending the partnership

• how much control each partner has

Which of the following does a franchisor NOT offer the franchisee?

• a license to trade

• a start-up package including help, advice and essential equipment

• an exclusive geographical area in which to operate

• one-off start-up fee

• Marketing support

Which of the following does the franchisee NOT offer to the franchisor?

• Training in how to run the business

• a one-off start-up fee

• on-going fee

• contribution to marketing costs

• profits from branded materials that are sold