Business Organisations

Sole trade can be defined as:

• the business employs only one person

• the business is owned by one person

• the firm has a single cusomer

• there is a single firm in the industry

Which of the following is a benefit of a sole trade?

• owners have limited liability

• shares can be sold to raise capital

• responsibilities can be shared

• the owner has complete control

A disadvantage of a sole trade business is:

• decisions take too long to make

• the owners may disagree

• capital is limited

• they are government owned

Which of the following is an advantage of partnership?

• all partners have limited liability

• shares can be sold on the stock exchange

• business survives the death of partners

• access to more capital than a sole trade

Which of the following is NOT a feature of a private limited company?

• shares can be issued to raise capital

• shares can be traded on the Stock Exchange

• all owners have limited liability

• business continues after the death of a shareholder

Which of the following is TRUE for most public limited companies?

• they are owned and controlled by government

• they are owned and controlled by shareholders

• they are owned by shareholders but controlled directors

• they are owned and controlled by the workers

One reason to change a private limited company into a public limited company is:

• they do not want to remain in the private sector

• they want to gain the benefits of limited liability

• they want to keep their annual accounts secret

• they want to raise additional capital for expansion

If the risks of starting up a business are so high, why do entrepreneurs create new businesses?

• the rewards are not greater than the opportunity cost

• the rewards can be very high

• the business do not fail if the entrepreneur is lucky

• more job security than working for an employer

All entrepreneurs are risk-takers. TRUE or FALSE?

• TRUE

• FALSE

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