types of business ownership

Question 1

What is a sole trader?

Answer 1

A business owned and operated by one individual.

Question 2

True or False: A sole trader has limited liability.

Answer 2

False.

Question 3

What are the main advantages of being a sole trader?

Answer 3

Complete control, easy to set up, and all profits go to the owner.

Question 4

What is a partnership?

Answer 4

A business owned by two or more individuals who share responsibilities and profits.

Question 5

Fill in the blank: In a partnership, decisions are usually made by __________.

Answer 5

consensus or majority.

Question 6

True or False: Partnerships have unlimited liability.

Answer 6

True.

Question 7

What is a limited company?

Answer 7

A business structure that limits the liability of its owners.

Question 8

What are the two types of limited companies?

Answer 8

Private Limited Company (Ltd) and Public Limited Company (PLC).

Question 9

True or False: In a Private Limited Company, shares can be sold to the public.

Answer 9

False.

Question 10

What is the main advantage of a Public Limited Company (PLC)?

Answer 10

Ability to raise capital by selling shares to the public.

Question 11

Fill in the blank: Shareholders in a limited company have __________ liability.

Answer 11

limited.

Question 12

What is a cooperative?

Answer 12

A business owned and operated by a group of individuals for their mutual benefit.

Question 13

True or False: Cooperatives are typically for profit.

Answer 13

False.

Question 14

What is the primary goal of a cooperative?

Answer 14

To meet the needs of its members.

Question 15

What is a franchise?

Answer 15

A business model where a franchisee pays for the rights to operate under a franchisor’s brand.

Question 16

Fill in the blank: Franchises benefit from __________ brand recognition.

Answer 16

established.

Question 17

True or False: Franchisees have complete control over their business operations.

Answer 17

False.

Question 18

What is the main disadvantage of being a sole trader?

Answer 18

Unlimited liability.

Question 19

What is unlimited liability?

Answer 19

The owner is personally responsible for all debts of the business.

Question 20

What is limited liability?

Answer 20

The owner’s financial responsibility is limited to their investment in the company.

Question 21

What is a social enterprise?

Answer 21

A business that aims to generate profit while addressing social issues.

Question 22

Fill in the blank: Social enterprises reinvest profits into __________ initiatives.

Answer 22

social.

Question 23

True or False: Social enterprises are not concerned with profit.

Answer 23

False.

Question 24

What is a joint venture?

Answer 24

A business arrangement where two or more parties agree to pool their resources for a specific project.

Question 25

Fill in the blank: In a joint venture, profits and risks are __________ between the parties.

Answer 25

shared.

Question 26

What is the main purpose of a non-profit organization?

Answer 26

To serve a public or mutual benefit rather than to generate profit.

Question 27

True or False: Non-profit organizations can make a profit.

Answer 27

True, but profits must be reinvested in the organization.

Question 28

What is an advantage of a partnership?

Answer 28

Shared responsibilities and skills among partners.

Question 29

Fill in the blank: In a Private Limited Company, ownership is divided into __________.

Answer 29

shares.

Question 30

What document is required to register a limited company?

Answer 30

Articles of Association.

Question 31

True or False: A cooperative must have at least 5 members.

Answer 31

True.

Question 32

What is the primary risk of a sole trader?

Answer 32

Personal financial loss due to unlimited liability.

Question 33

What is a shareholder?

Answer 33

An individual or entity that owns shares in a company.

Question 34

Fill in the blank: A franchise agreement is a __________ contract.

Answer 34

legal.

Question 35

What is a key characteristic of a franchise?

Answer 35

Standardized operating procedures.

Question 36

True or False: All business ownership types have the same tax implications.

Answer 36

False.

Question 37

What is the main advantage of a Public Limited Company?

Answer 37

Access to capital markets for raising funds.

Question 38

What is a disadvantage of a partnership?

Answer 38

Potential for disputes among partners.

Question 39

Fill in the blank: A franchisee pays a __________ fee to the franchisor.

Answer 39

royalty.

Question 40

What is the role of a board of directors in a limited company?

Answer 40

To oversee the management and make strategic decisions.

Question 41

True or False: A social enterprise can be a for-profit business.

Answer 41

True.

Question 42

What is a common reason for forming a joint venture?

Answer 42

To share costs and risks associated with a project.

Question 43

Fill in the blank: Non-profit organizations often rely on __________ for funding.

Answer 43

donations.

Question 44

What is an example of a social enterprise?

Answer 44

A fair trade organization.

Question 45

True or False: In a cooperative, each member typically has one vote.

Answer 45

True.

Question 46

What is the main disadvantage of a Public Limited Company?

Answer 46

Increased scrutiny and regulatory requirements.

Question 47

Fill in the blank: A __________ is a legal entity that can own assets and incur liabilities.

Answer 47

limited company.

Question 48

What is the primary purpose of a business plan in a franchise?

Answer 48

To outline the operational strategy and financial projections.

Question 49

True or False: Partnerships can be formed without a formal agreement.

Answer 49

True.

Question 50

What is the difference between a private and a public limited company?

Answer 50

Private limited companies cannot sell shares to the public, while public limited companies can.

Question 51

Fill in the blank: A __________ is an agreement between two or more parties to work together.

Answer 51

joint venture.

Question 52

What is a disadvantage of being a sole trader?

Answer 52

Lack of continuity if the owner dies.

Question 53

What is a key benefit of limited liability for shareholders?

Answer 53

Protection of personal assets from company debts.

Question 54

True or False: All members of a cooperative share profits equally.

Answer 54

False.

Question 55

What does the term 'stakeholder' refer to?

Answer 55

Any individual or group that has an interest in the success of a business.

Question 56

Fill in the blank: A __________ is a business owned by its members and operated for their benefit.

Answer 56

cooperative.

Question 57

What is the primary source of funding for non-profit organizations?

Answer 57

Grants and donations.

Question 58

True or False: A franchisee has to follow the franchisor's business model.

Answer 58

True.

Question 59

What is the main reason for a business to become a limited company?

Answer 59

To limit the owners' liability.

Question 60

Fill in the blank: A __________ is a business model that allows individuals to operate under a recognized brand.

Answer 60

franchise.

Question 61

What is the primary benefit of a joint venture?

Answer 61

Combining resources and expertise to achieve a common goal.

Question 62

True or False: A limited company can be owned by a single individual.

Answer 62

True.

Question 63

What is a key characteristic of a social enterprise?

Answer 63

It aims to create social value alongside profit.

Question 64

Fill in the blank: In a partnership, partners share both __________ and losses.

Answer 64

profits.

Question 65

What type of business ownership is characterized by shared ownership and democratic decision-making?

Answer 65

Cooperative.

Question 66

What is the main focus of a non-profit organization?

Answer 66

To fulfill a charitable mission.

Question 67

Fill in the blank: A __________ allows for shared investment and reduced risk in new ventures.

Answer 67

joint venture.

Question 68

True or False: A Public Limited Company can be listed on the stock exchange.

Answer 68

True.

Question 69

What is the main requirement for forming a limited company?

Answer 69

Registering with Companies House.