IGCSE_Chap 4_Types of Business Organisations IGCSE Quiz

What is the main advantage of a sole proprietorship?

• No need to pay taxes

• Limited liability for the owner

• Full control over the business and receives all the profits

• Shared control with other partners

What is the main disadvantage of a sole proprietorship?

• Unlimited liability

• Limited liability

• Tax advantages

• Ease of formation

What are the advantages of forming a partnership?

• Decreased decision-making power

• Unlimited liability for all partners

• Increased competition with other businesses

• Shared decision-making and resources, shared risks and responsibilities

What are the key features of a franchise agreement?

• Weather conditions, local language spoken, public transportation options

• Color of the franchise logo, office location, employee dress code

• Rights and obligations of both parties, fees, renewal/termination terms

• Number of employees, company mission statement, CEO's favorite food

What are the benefits of buying a franchise?

• Brand recognition, established business model, training and support from the franchisor, and potential for higher success rate

• Joining fees to establish the business, terms and conditions to be followed by the franchisee

• No brand recognition, no training support from the franchisor

• No established business model

What is a joint venture and when is it commonly used?

• A joint venture is a type of limited company like public and private limited.

• A joint venture is a partnership between two sole traders.

• A joint venture is a type of business with the only aim to make profits.

• A joint venture is commonly used when two or more companies want to collaborate on a specific project or enter a new market together.

What are the advantages of a private limited company over a public limited company?

• Limited liability, separate legal entity

• Control over who can buy shares

• Access to greater funds

• Unlimited liability, shared legal entity

Choose 1 advantage and 1 disadvantage of a public limited company

• No requirement to disclose financial information to the public

• Costly to set up

• Limited capital

• Limited liability

Choose 1 advantage and 1 disadvantage of a joint venture

• Different expertise

• Difficult decision making

• Pay a fee to the partner-business

• Business expansion for the foreign business only

Choose 1 advantage and 1 disadvantage of a franchise

• Negative publicity affects all franchises

• Franchisor pays a fee to the franchisee

• More risks of business failure

• Training support and advice provided by the franchisor