Chapter 4 - Types of Business Organizations

What is a sole trader?

• A business owned by multiple people

• A business owned and controlled by one person

• A type of joint-stock company

• A government-owned corporation

What is an advantage of being a sole trader?

• Unlimited liability

• Shared responsibilities

• High capital investment

• Full control over the business

What is a disadvantage of a partnership?

• Easy to set up

• High capital investment

• Conflicts between partners

• Limited liability

What distinguishes public limited companies from sole traders?

• They do not have a separate legal identity

• They are owned by one person

• They can sell shares to raise capital

• They have unlimited liability

What is a key feature of public limited companies?

• They are always small businesses

• They cannot advertise their shares

• They have limited liability

• Shares can only be sold to friends and family

What is a disadvantage of public limited companies?

• Unlimited liability

• No need for an Annual General Meeting

• Required to disclose financial information

• Limited access to capital

What is a franchise?

• A type of partnership

• A business owned by the government

• A joint venture between two companies

• A license granted to use a business idea

What is an advantage for a franchisee?

• Established brand and trademark

• Complete independence in operations

• Full control over the business

• No need to pay franchise fees

What is a disadvantage for the franchisor?

• No income from franchisees

• Limited market reach

• Loss of control over the business

• High initial investment

What is a joint venture?

• A business owned by one person

• An agreement between two or more businesses to work together

• A type of public limited company

• A franchise agreement