Types of Business Organisation Quiz

Which type of business organisation is owned and operated by just one person?

• Public limited companies

• Franchises

• Partnerships

• Sole traders

What is the main advantage of a sole trader business?

• Complete control over the business

• More capital to allow expansion

• Limited liability to shareholders

• Sharing of costs

What is the main disadvantage of a partnership business?

• Complete secrecy in business matters

• No limited liability

• Disagreement and consulting all partners takes time

• More regulations and controls

Which type of business organisation offers partners limited liability but shares cannot be bought and sold?

• Limited partnerships

• Public limited companies

• Sole traders

• Joint ventures

What is the main advantage of a private limited company?

• No limited liability

• Larger sums of capital to invest in the business

• Separate legal identity

• Limited liability to shareholders

What is the main disadvantage of a public limited company?

• Limited liability to shareholders

• Selling shares to the public is expensive

• No limit to the number of shareholders

• Separate legal identity

What is the main advantage of a franchise business?

• The franchisee keeps profits from the outlet

• Poor management of one franchised outlet could lead to a bad reputation

• Expansion of the franchised business is much faster

• Less independence

What is the main advantage of a joint venture?

• No private shareholders to insist on high profits and efficiency

• Risks are shared

• Disagreements over important decisions might occur

• More regulations and controls

What is the main advantage of a public corporation?

• Some industries are important that government ownership is essential

• No private shareholders to insist on high profits and efficiency

• Subsidies can lead to inefficiency

• Ensure consumers are not taken advantage of by privately owned monopolists

What type of business organisation is owned and controlled by the state (government)?

• Joint ventures

• Public corporations

• Limited partnerships

• Franchises