Business Organisation Basics

What are the different types of business organisations?

• Nonprofit, government, charity

• Limited partnership, joint venture, trust

• Sole proprietorship, partnership, corporation, limited liability company (LLC)

• Franchise, cooperative, conglomerate

Explain the characteristics of a partnership business.

• Partnership businesses do not share profits or losses

• Partnership businesses involve two or more individuals sharing profits

• Partnership businesses involve only one individual

• Partnership businesses have limited liability

What is the main difference between unincorporated and incorporated businesses?

• Incorporated businesses are not subject to government regulations, unlike unincorporated businesses.

• Unincorporated businesses are more likely to attract investors than incorporated businesses.

• Incorporated businesses have a separate legal entity and provide limited liability protection, while unincorporated businesses do not have this separation and owners are personally liable.

• Incorporated businesses have fewer tax advantages compared to unincorporated businesses.

How does limited liability benefit an incorporated business?

• Limited liability allows owners to mix personal and business assets freely.

• Limited liability guarantees business success and profitability.

• Limited liability protects personal assets of owners/shareholders from business debts and liabilities.

• Limited liability exempts owners from paying taxes.

Describe the role of public sector organisations in the economy.

• Public sector organisations provide essential services,

• Public sector organisations have no impact on market stability

• Public sector organisations focus solely on profit-making

• Public sector organisations hinder economic growth

Name one example of a public sector organisation.

• United States Postal Service (USPS)

• Internal Revenue Service (IRS)

• National Aeronautics and Space Administration (NASA)

• Federal Bureau of Investigation (FBI)

What is the primary goal of public sector organisations?

• Minimize community services

• Serve the public interest

• Ignore public interest

• Maximize profits

How do public sector organisations generate revenue?

• Investment income

• Foreign aid

• Taxes, fees, fines, and sales of goods or services

• Donations from private individuals

What are the advantages of a sole proprietorship?

• Limited liability protection

• Complex tax reporting requirements

• Full control over decision-making, easy and inexpensive to establish

• Access to external funding only

What are the disadvantages of a partnership business?

• High level of control

• Equal distribution of profits

• Limited liability

• Shared profits, disagreements among partners