forms of business

Question 1

sole trader

Answer 1

this is a person who owns and runs his or her own business

Question 2

private limited company

Answer 2

this is a company formed when between 1-50 people put together money to start a new business with limited liability

Question 3

limited liability

Answer 3

• this means that if a private limited company goes bankrupt (has debts they are unable to pay back)
• the shareholders will only lose the amount they have invested in the company

Question 4

unlimited liability

Answer 4

• this means that a sole trader is responsible for all the debts of the business, they must pay back all the debts even if this means they must sell their company/personal possessions

Question 5

co-operative business

Answer 5

this is an organisation formed by people who join together to achieve a particular objective that they could not achieve on their own

Question 6

state-sponsored bodies

Answer 6

these are companies owned by the government or the state

Question 7

privatisation

Answer 7

this is the term used to describe the sale of a semi-state company by the governemnt

Question 8

3 sources of finance

Answer 8

• short
• mid
• long

Question 9

short term must be paid back within

Answer 9

1 year

Question 10

long term must be paid back within

Answer 10

5 years

Question 11

medium term must be paid back within

Answer 11

1-5 years

Question 12

example of short term

Answer 12

bank overdraft, trade credit

Question 13

example of medium term

Answer 13

hire purchase, leasing

Question 14

example of long term

Answer 14

gants, debentures, equity

Question 15

production options

Answer 15

• job
• batch
• mass

Question 16

job production

Answer 16

• suitable for specialized work
• each product is individual and unique
• expensive to buy
• made by a very skillful worker
  Eg. wedding dress

Question 17

mass production

Answer 17

• involves making a product continuously, 24 hours a day, 7 days a week, 365 days of the year
• only suitable for products that are in continuous demand by consumers
• the product is the same for all customers
• mainly uses machines than workers- very specialized
• unskilled workers on assembly line
• lowest cost- cheapest
  E.g Toilet rolls.

Question 17

batch production

Answer 17

• involves making a large number of products all in one go (prodcution line)
• the product is the same for all customers.
• it is made in advance and ready for the customer when she comes into the shop
• cheaper due to the economies of scale.
• uses workers who are not highly skilled.
  E.g. newspapers, books, Leaving Cert papers.