2 - Business structure

Question 1

Define private limited company

Answer 1

a business owned by shareholders who are often members of the same family; this company cannot sell shares to the general public

Question 2

Define initial public offering (IPO)

Answer 2

an offer to the public, to buy shares in a public limited company

Question 3

Define public limited company

Answer 3

a company whose shares are traded on the stock exchange and can be bought and sold by the general public

Question 4

Define primary sector business activity

Answer 4

firms engaged in farming, fishing, oil extraction and all other industried that extract natural resources so that they can be used and processed

Question 5

Define secondary sector business activity

Answer 5

firms that manufacture and process products from natural resources, including computers, brewing, baking, clothes making and construction

Question 6

Define tertiary sector business activity

Answer 6

firms providing services to consumers and other businesses, such as retailing, transport, insurance, banking, hotels and tourism

Question 7

Define quaternanry sector business activity

Answer 7

business providing information services, such as computing, web design, ICT, management consultancies and R&D

Question 8

Define public sector

Answer 8

organisations accountable to and controlled by central or local government

Question 9

Define private sector

Answer 9

businesses owned and conrolled by individuals or groups of individuals

Question 10

Define mixed economy

Answer 10

economic resources are owned and controlled by both private and public sectors

Question 11

Define free-market economy

Answer 11

economic resources are owned largely by the private sector with very little state intervention

Question 12

Define command economy

Answer 12

economic resources are owned, planned and controlled by the state

Question 13

Define public corporation

Answer 13

a business enterprise owned and controlled by the state also known as nationalised industry

Question 14

Define sole trader

Answer 14

a business in which one person provides the permanent finance and in return has full control of the business and it able to kepp all the profits

Question 15

Define unlimited liability

Answer 15

business owners have full legal responsibility for the debts of the business

Question 16

Define partnership

Answer 16

a business formed by two or more people to carry on a business together, with shared capital investment and usually shared responsibility

Question 17

Define limited liability

Answer 17

the only liability a shareholder has if the company fails is the amount invested in the company, not the total wealth of the shareholder

Question 18

Define share

Answer 18

a certificate confirming part-ownership of a company and entitling the shareholder owner to dividends and certain shareholder rights

Question 19

Define shareholder

Answer 19

a person or institution owning shares in a limited company

Question 20

Define memorandum of association

Answer 20

this states the name of the company, the address of the head office trough which it can be contacted, the maximum share capital for which the company seeks authorisation and the declared aims of the business

Question 21

Define articles of association

Answer 21

this document covers the internal workings and control of the business, the names of directors and the procedures to be followed at meetings

Question 22

Define cooperative

Answer 22

a jointly owned business operated by memebers for their mutual benefit, to produce or distribute goods or services

Question 23

Define franchise

Answer 23

the legal right to use the name, logo and trading systems of a existing successful business

Question 24

Define franchiser

Answer 24

a person or business that sells the right to open stores and sell products or services using the brand name and brand identity

Question 25

Define franchisee

Answer 25

a person or business that buys the right from the franchiser to operate the franchise

Question 26

Define joint venture

Answer 26

two or more business agree to work closely together on a perticular project and create a seperate business division to do so

Question 27

Define social enterprise

Answer 27

a business with mainly social objectives that re-invest most of its profit into benefiting society rather than maximising returns to owners