What is a key advantage of a Private Limited Company?

Limited liability means personal belongings are safe from business debts.

What is a disadvantage of a Private Limited Company?

There is limited control as decisions are made by a small group.

What is a Public Limited Company (Plc.)?

A Public Limited Company is a business that sells shares to the public.

What is a key advantage of a Public Limited Company?

It can raise large amounts of finance by selling shares.

What is a disadvantage of a Public Limited Company?

There is less control as decisions are shared with many shareholders.

A franchise is a business model where others use a brand name and pay fees to the original company.

What is a key advantage of a Franchise?

Franchisees get the benefit of a well-known brand and support.

What is a disadvantage of a Franchise?

Franchisees must pay fees and share profits with the franchisor.

What is a Joint Venture?

A joint venture is when two companies work together, sharing resources and profits.

What is a key advantage of a Joint Venture?

Both companies can share risks and knowledge.

What is a disadvantage of a Joint Venture?

Disagreements can occur about prices and strategies.

What is unlimited liability?

Unlimited liability means the owner is personally responsible for all business debts.

What is limited liability?

Limited liability means the owner's risk is limited to their investment in the company.

What factors should be considered when choosing a business type?

Factors include control, risk, size of the market, and business objectives.

What is the main risk for Sole Traders?

Their personal assets are at risk if the business incurs debts.

What is the main benefit of a Partnership?

Workload and responsibilities are shared among the owners.

What is the main goal of a Public Limited Company?

To raise large amounts of finance by selling shares to the public.

What is the main purpose of a Franchise?

To allow others to use a brand name and sell products for a fee.

What is the main advantage of a Limited Company?

Owners have limited liability, protecting personal assets.

What is the main disadvantage of a Limited Company?

There are more regulations and requirements to follow.

What is the significance of the story of 'Sweet Treats'?

It illustrates the journey of a business from a small operation to a Public Limited Company.

What is the moral of the story regarding business types?

Each business must choose the best type based on its individual situation.

What is the role of a franchisor?

The franchisor provides the brand name and support to franchisees.

What is the role of a franchisee?

The franchisee operates a business using the franchisor's brand and pays fees.

What is a key challenge for Sole Traders?

They often work long hours and take on all responsibilities.

What is a key benefit of a Partnership?

Partners can combine their skills to run the business more efficiently.

What happens in a Joint Venture?

Both companies share resources, risks, and profits.

What is the first step for many new businesses?

Most businesses start as a sole trader or partnership.

What is a common reason for businesses to become Limited Companies?

To access more sources of finance for growth.

What is the importance of customer trust for Global Motors?

It helps them expand into international markets successfully.

What is the benefit of selling shares to family and friends in a Private Limited Company?

It allows for raising capital while maintaining control.

What is a disadvantage of sharing profits in a Partnership?

Neither partner may earn as much as a sole trader.

What is the significance of the coffee machine breaking for Alex?

It highlighted the risk of unlimited liability for Sole Traders.

What is the benefit of having a well-known brand in a Franchise?

It attracts more customers and builds trust.

What is the main goal of Sweet Treats becoming a Public Limited Company?

To raise finance for expansion.

What is the main challenge of being a Public Limited Company?

More regulations and less control for owners.

What is the benefit of a Joint Venture for Sweet Treats?

They can learn from CoffeeTime about coffee while sharing resources.

What is the main risk for partners in a Partnership?

They have unlimited liability for business debts.

What is the main advantage of being a Sole Trader?

Complete control over business decisions.

What is the main disadvantage of being a Sole Trader?

Difficult to raise a large amount of capital.

What is the benefit of a Limited Company for owners?

Their personal risk is limited to their investment.

What is the main goal of a Franchise system?

To expand the brand without opening every shop themselves.

What is the significance of the lawyer's advice to Adidev and friends?

It reassured them that their personal assets were safe with limited liability.

Types of Business Organizations Flashcards

Student preview

148 questions

Show all answers

1.

FLASHCARD QUESTION

Front

What is a Sole Trader?

Back

A sole trader is a business owned and run by one person who has complete control and keeps all the profits.

2.

FLASHCARD QUESTION

Front

What is a key advantage of being a Sole Trader?

Back

You get to keep all the profits.

3.

FLASHCARD QUESTION

Front

What is a disadvantage of being a Sole Trader?

Back

The owner has unlimited liability for business debts.

4.

FLASHCARD QUESTION

Front

What is a Partnership?

Back

A partnership is a business owned by two or more people who share responsibilities and profits.

5.

FLASHCARD QUESTION

Front

What is a key advantage of a Partnership?

Back

You have more skills and ideas available because you have multiple owners.

6.

FLASHCARD QUESTION

Front

What is a disadvantage of a Partnership?

Back

Partners may disagree on decisions, which can lead to conflict.

7.

FLASHCARD QUESTION

Front

What is a Private Limited Company (Ltd.)?

Back

A Private Limited Company is a business that shares are only sold to family and friends.

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