1.5.4

Question 1

Sole trader

Answer 1

A business that is owned and operated by a single individual

Has unlimited liability meaning they are responsible for all debts of the business and their personal assets are not protected

They have complete control of all decisions

Question 2

Partnerships

Answer 2

Business that involves two or more individuals who own and operate the business together.

Both share responsibilities such as decision making, management and finances

Question 3

Private limited company (Ltd)

Answer 3

Privately owned and companies shares are not available to the public.

Have limited liability meaning personal assets of shareholders are protected from the company’s debts.

Ownership is restricted to a small group of shareholders meaning they are no responsible for any of the business debts

Question 4

Franchise

Answer 4

A business in which the operator pays a mixture of fees in order to sell a company’s products and services under its name.

The franchisor (company) gains money from the fees paid by the franchisee (individual) to use the parent company name and resources legally.

Question 5

Social enterprise

Answer 5

A type of business where it aims to address social or environmental issues while generating revenue

Question 6

Online business

Answer 6

A business that operates primarily through the internet on digital platforms

Advantages - can reach wider audience, lower costs, can operate 24 hours.

Disadvantages - fierce competition, risk of getting hacked, hard to build loyalty without face to face interaction.

Question 7

Unlimited liability

Answer 7

If the business goes into debt then the owners would need to pay using his savings, finances and assets.

Question 8

Public limited company (PLC)

Answer 8

Where a business is legally allowed to sell its shares on the stock market in order to raise finance.

Shareholders have limited liability meaning they are not liable for the businesses debts