Understanding Business Structures Quiz

Which of the following is a characteristic of a public limited company?

• Shares are not traded on the stock exchange.

• Shares can be bought by the general public.

• Ownership is restricted to a small group of people.

• It cannot raise capital through issuing shares.

Which of the following is true about a franchise business model?

• The franchisee has complete control over the business operations.

• The franchisor provides the business model and brand.

• Franchises are only available in the food industry.

• Franchisees do not pay any fees to the franchisor.

Which of the following is a disadvantage of a public limited company?

• Limited access to capital.

• Increased regulatory & financial scrutiny.

• Difficulty in transferring ownership.

• Limited liability for shareholders.

In a private limited company, who typically owns the shares?

• The general public.

• A small group of private investors.

• Government entities.

• Employees only.

What is a common feature of a franchise agreement?

• The franchisee owns the brand.

• The franchisor provides ongoing support and training.

• The franchisee can alter the business model freely.

• No initial investment is required.

What is a key characteristic of a sole trader?

• Limited liability.

• Shared ownership.

• Full personal liability for debts.

• Ability to issue shares.

Which of the following is a requirement for a public limited company in the UK?

• Must have at least one director.

• Must have a minimum share capital of £50,000.

• Must be owned by a single individual.

• Must not trade shares publicly.

What is a potential drawback of a franchise for the franchisee?

• Complete independence in business operations.

• High initial investment and ongoing fees.

• No support from the franchisor.

• Unlimited liability.

What is an advantage of a private limited company over a public limited company?

• Ability to raise capital from the public.

• Less regulatory compliance.

• Shares are easily transferable.

• More public scrutiny.

Which of the following is a characteristic of a sole trader?

• Ability to issue shares.

• Limited liability.

• Simple to set up and operate.

• Shared decision-making.