3.1.2 Different Forms of Business

Organisations can be in the Public Sector or the Private Sector. Which of the following statements is true about public sector organisations?

• They are owned and run by private individuals.

• They aim to make a profit.

• They are funded by the UK tax system.

• They range from small sole traders to huge organisations.

Which of the following is NOT a characteristic of non-profit businesses?

• They are set up to make a profit.

• They help people in need or benefit the community.

• They have money coming into and going out of the business.

• The money generated by the business doesn’t go to the owners or shareholders as profit.

What is the main difference between non-profit businesses and other businesses?

• Non-profit businesses aim to make a profit.

• Non-profit businesses do not have money coming in and going out.

• The money generated by non-profit businesses doesn’t go to the owners or shareholders as profit.

• Non-profit businesses do not help people in need or benefit the community.

Which of the following organisations is an example of a charity?

• John Lewis

• British Red Cross

• ASDA

• NHS

What is the main objective of social enterprises?

• To make a profit for the owners.

• To provide services to the public.

• To pay for its social activities.

• To reinvest profits into the business.

What does unlimited liability mean for a business owner?

• The owner is not personally responsible for the debts of the business.

• The business debts become the personal debts of the owner.

• The owner can only lose the money they have invested in the company.

• The owner has a separate legal identity from the business.

Which of the following is a characteristic of limited liability?

• Owners are personally responsible for the debts of the business.

• The business debts become the personal debts of the owner.

• Owners aren’t personally responsible for the debts of the business.

• Owners can be forced to sell personal assets to pay off business debts.

What is the essential feature of a sole trader business?

• Limited liability

• Shared responsibility

• Full responsibility for financial control

• No responsibility for debts

What is one of the advantages of being a sole trader?

• Shared responsibilities

• Limited liability

• Complete control over decisions

• High legal costs

What is one of the disadvantages of being a sole trader?

• Shared profits

• No cover if the trader gets ill

• High complexity in bookkeeping

• No control over decisions