Podcast
Questions and Answers
What distinguishes a local business from a national business?
What distinguishes a local business from a national business?
- A national business is owned by the government.
- A local business operates only within a specific locality. (correct)
- A national business operates in a single local area.
- A local business operates in multiple countries.
Which type of business is primarily intended to generate profit?
Which type of business is primarily intended to generate profit?
- Voluntary organization
- Non-profit business
- Charitable institution
- Profit motive business (correct)
What is a key feature of a partnership business?
What is a key feature of a partnership business?
- It is owned by multiple individuals who share control. (correct)
- It is set up to operate in local areas only.
- It is owned by a single individual.
- It is primarily for charitable purposes.
What is a defining characteristic of an international business?
What is a defining characteristic of an international business?
In which ownership structure is a business controlled by the government?
In which ownership structure is a business controlled by the government?
Which of the following best describes a global business?
Which of the following best describes a global business?
Which ownership type features individuals or shareholders who own the business?
Which ownership type features individuals or shareholders who own the business?
Which of the following is NOT a type of business based on its purpose?
Which of the following is NOT a type of business based on its purpose?
What is a significant disadvantage of owning a franchise?
What is a significant disadvantage of owning a franchise?
Which type of business primarily extracts raw materials from nature?
Which type of business primarily extracts raw materials from nature?
What characterizes a secondary business?
What characterizes a secondary business?
Which type of business primarily provides services rather than products?
Which type of business primarily provides services rather than products?
What is a feature of the tertiary business sector?
What is a feature of the tertiary business sector?
Which type of business focuses on intellectual activities such as research and education?
Which type of business focuses on intellectual activities such as research and education?
What is a common characteristic of trading (retailing) businesses?
What is a common characteristic of trading (retailing) businesses?
Which of the following is NOT a disadvantage of operating a franchise?
Which of the following is NOT a disadvantage of operating a franchise?
What is a primary advantage of owning a corporation?
What is a primary advantage of owning a corporation?
Which of the following is a disadvantage of being a sole trader?
Which of the following is a disadvantage of being a sole trader?
In a partnership, what is a significant risk associated with unlimited liability?
In a partnership, what is a significant risk associated with unlimited liability?
Which of the following statements about franchises is incorrect?
Which of the following statements about franchises is incorrect?
What is a common disadvantage faced by corporations?
What is a common disadvantage faced by corporations?
Which of the following accurately describes a characteristic of partnerships?
Which of the following accurately describes a characteristic of partnerships?
Why might a sole trader find it challenging to raise capital?
Why might a sole trader find it challenging to raise capital?
What is a significant trait of business ownership in franchises?
What is a significant trait of business ownership in franchises?
Flashcards are hidden until you start studying
Study Notes
Business Types: Expanse of Operation
- Local: Operates within a specific geographical area.
- National: Operates across the entire country.
- International: Operates in multiple countries.
- Global: Operates worldwide.
Business Types: Ownership
- Public Business: Owned and controlled by the government for the benefit of its citizens.
- Private Business: Owned and controlled by private individuals or shareholders.
Business Types: Business Purpose
- Profit Motive: Established with the primary goal of generating profits.
- Non-Profit/Voluntary: Established for charitable or social purposes, not to generate profit. Owners are called trustees.
Business Types: Legal Form
- Sole Trading: Owned and controlled by a single individual.
- Partnership: Owned and controlled by two or more people, called partners.
- Company (Corporation): Owned by shareholders who elect a board of directors to make business decisions.
- Franchise: A business license granted by one company to another to sell goods or services under the same name.
Sole Trader: Advantages and Disadvantages
- Advantages:
- Simple to set up
- Owner has complete control over decisions
- Owner keeps all profits
- Minimum legal requirements
- Disadvantages:
- Possible lack of experience or skills
- Difficult to secure large amounts of capital
- Unlimited liability (Owner's personal assets can be seized to pay business debts)
Partnership: Advantages and Disadvantages
- Advantages:
- Easy to establish
- Combines talent, skills, and judgment of partners
- Access to larger capital
- Disadvantages:
- Unlimited liability for partners (Each partner is responsible for all debts, even those incurred by other partners)
- Potential for disagreements and conflicts
Corporation: Advantages and Disadvantages
- Advantages:
- Limited liability for shareholders (Personal assets are protected from business debts)
- Easy transfer of ownership (Shares can be bought and sold)
- Corporations can raise significant capital through stock issuance
- Disadvantages:
- Complex government regulations
- Higher tax burden
- Slower decision-making process
Franchise: Advantages and Disadvantages
- Advantages:
- Reduced risk due to a proven business model
- Brand recognition and established customer loyalty
- Support and training provided by franchisor
- Disadvantages:
- High initial investment (Franchise fees, royalties, and other costs)
- Limited control over decision-making and operations due to franchisor guidelines
Business Types: Business Sector
- Primary Business: Extracts raw materials from nature (e.g., oil wells).
- Secondary Business: Transforms raw materials into finished goods (e.g., manufacturing).
- Tertiary Business: Provides goods and services directly to consumers (e.g., retail, banking).
- Quaternary Business: Focuses on intellectual activities such as education, research, and software development.
Business Types: Nature of Operation
- Trading (Retailing): Sells products purchased from other businesses to customers (e.g., grocery stores).
- Manufacturing: Converts materials, labor, and overhead into finished products to sell to customers.
- Services: Provides services, instead of products, to customers (e.g., banking, hotels, hospitals).
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
