Informal Vs Formal Business

What is a key feature of a formal business?

• A. It sells only to friends and family
  

• B. It is not registered and pays no taxes
  

• C. It follows the law and pays taxes
  

• D. It moves from place to place

Which of the following best describes an informal business?

• A. It has branches in many cities
  

• B. It is usually unregistered and small
  

• C. It pays high wages
  

• D. It has strict employment contracts

Why might some people prefer to start informal businesses?

• A. They enjoy paying tax
  

• B. They want to follow many rules
  

• C. It’s quick and easy with low costs
  

• D. They must get a trading licence first

Which of the following is an example of a formal business?

• A. A fruit vendor on the street
  

• B. A spaza shop
  

• C. A hair salon in someone’s yard
  

• D. A registered supermarket chain

One disadvantage of formal businesses is:

• A. They are not trusted
  

• B. They do not pay salaries
  

• C. They may be slow to change due to rules
  

• D. They sell only low-quality goods

Informal businesses mostly serve:

• A. International customers

• B. Government workers

• C. Local communities with basic needs

• 
  D. Large companies only

Formal businesses usually buy stock from:

• A. Informal traders

• B. Their own customers

• C. Government shops

• D. Other formal businesses or manufacturers

Informal businesses often buy their stock from:

• A. Banks

• B. Formal businesses

• C. Farmers

• D. Schools

Which of these is a consumer in the business world?

• A. A person making bread
  

• B. A business buying goods to sell
  

• C. A worker receiving a salary
  

• D. A child doing homework

Why do most informal businesses not buy directly from manufacturers?

• A. They don’t need stock
  

• B. They produce everything themselves
  

• C. Manufacturers can’t deliver small amounts
  

• D. They already own factories