R067 - Topic Area 5 - Business and Enterprise - OCR

(5.1) A ____ ______ is a business owned and controlled by one individual

(a)  

(5.1) A ___________ is a business that is owned and controlled by two or more individuals. In most cases, there are 2-20 partners. However, this number can be exceeded for a professional ___________, e.g. accountants and solicitors

(a)  

(5.1) A _________ is a business organisation where the franchisor (the owner of the business idea) grants a licence (the _________ ) to another business (the franchisee) so they can sell their brand or business idea. The franchisor owns the business idea and decides how the business will be operated and run.

(a)  

(5.1) Drag and drop into the correct column for a Sole Trader.

Groups:

(a) Advanatages

,

(b) Disadvantages

,

(c) Examples

• Sole traders can choose their own working hours, holidays, etc.

• Plumber

• Easy to set up

• May have to work long hours and will not be paid during time off for a holiday or illness.

• Low set-up costs

• Mobile hairdresser (alone)

• Difficult for the business to grow very large due to the amount of money available

• No one to share responsibility or decisions with.

• Electrician

• Limited legal requirements in relation to accounting, etc.

• The owner makes all the business decisions, reducing the time taken to make a decision

• Has unlimited Liability

• Difficult for the business to grow as there is a limit to the amount of work one person can do

• Banks are less keen to lend to sole traders as they view them as more of a risk.

(5.1) Drag and drop into the correct column for a Partnership.

Groups:

(a) Advanatages

,

(b) Disadvantages

,

(c) Examples

• Decision making can be time-consuming as all partners need to be consulted.

• Greater capital investment available from the different partners.

• Increased public image compared with sole traders.

• Solicitor

• Responsibility and risk are shared among the partners.

• Partners can discuss queries before finalising decisions.

• Small/medium-sized retail store

• Partners bring different skills and attributes to help the business.

• All partners are jointly responsible for the business debt

• There is potential for disagreement and conflict in decision making.

• Estate agent

• Accountant

(5.1) Drag and drop into the correct column for a Franchise.

Groups:

(a) Advanatages

,

(b) Disadvantages

,

(c) Examples

• The initial and ongoing costs of operating a franchise are not cheap.

• The franchisee will need to stick to the marketing activities agreed by the franchisor.

• Pizza Hut

• The franchisee owns the business but not the idea.

• Starbucks

• It is easier to gain customers as the brand is already well known and recognised.

• McDonald's

• May be difficult to break into a new area if competing with other franchisees.

• The franchisee benefits from the skills, advice and support of the franchisor.

• Limited business and industry experience are required

• As the franchise will be well known, it is easier to raise finance.

(5.1) Liability is the (a)   and financial (b)   of a business.

• debts
• obligations
• profits
• revenues
• investments

(5.1) In a (a)   partnership, each partner of the business is not personally liable for the business's debts if they cannot be paid. A partner is liable only to the amount of ​ (b)   they ​ (c)   into the business - this is known as (d)   .

• limited liability (2)
• money
• invested
• unlimited liability
• time
• put
• limited liability (1)

(5.1) Match the following

• Limited liability partnership

• Will own the right to use the business idea and the individual business that is set up

• Sole trader

• Limited

• Partnership (unlimited liability)

• Single owner

• Private limited company

• Shareholders

• Franchise

• Unlimited

(5.1) Private limited company information:

Groups:

(a) Owners

,

(b) Legal Requirements

,

(c) Decision Making

,

(d) Wrong Answers

• Will register with HMRC to pay taxation on profits made.

• Shareholders (family and friends)

• The company owns the business idea.

• The company will decide on working hours, holidays, etc.

• Documents need to be submitted to Companies House - Memorandum and Articles of Association.

• Directors appointed by the shareholders to run the company on their behalf.