types of commercial enterprises pt1

Question 1

define public sector

Answer 1

government organisations that provide goods and services in the economy

Question 2

define private sector

Answer 2

provision of goods and services by businesses owned by individuals or groups of individuals

Question 3

2 legal forms of private sectors

Answer 3

unincorporated—no legal difference between owner and business
incorporated—separate legal identity from owners (called limited companies)

Question 4

sole trader (features)

Answer 4

-simple formation
-no special documents
-raise capital from own resources
-complete ownership
-any profit will belong to the owner
-unlimited liability

Question 5

sole trader (advantages and disadvantages)

Answer 5

+owner keeps all profit
+simple to set up
+qualify for government help
-unlimited liability
-too much responsibility
-too small to exploit economies of scale

Question 6

partnerships (features)

Answer 6

no legal requirements
employ other staff as assistants
partners draw up a deed of partnership
capital is raised from all partners
can have a sleeping partner
can divide the workload
unlimited liability

Question 7

partnership (advantages and disadvantages)

Answer 7

+easy to set up
+job of running business is shared
+financial info not published
-unlimited liability
-profit is shared
-partnerships are still small