Co-operatives and Merit Goods

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What is a major disadvantage of a sole proprietorship?

Unlimited liability (correct)

Limited liability

Difficulty in raising capital

Difficulty in making decisions

In a partnership, how are profits typically divided?

Equally between partners (correct)

Based on individual contributions

Based on experience

Based on seniority

What is a key advantage of a private limited company?

No requirement for external auditing

Limited liability (correct)

Unlimited liability

No need for a board of directors

What happens when a partner leaves a partnership?

The partnership is automatically dissolved Signup and view all the answers

Who owns a private limited company?

The shareholders Signup and view all the answers

Why might a partnership be suitable for professionals such as surveyors or architects?

It is more common among professionals Signup and view all the answers

What is the key characteristic of a co-operative?

It is a democratically run business where members have shared ownership. Signup and view all the answers

What is a key benefit for the franchiser in a franchising arrangement?

The franchiser gets financial returns for little drain on resources. Signup and view all the answers

What is a key advantage for the franchisee in a franchising arrangement?

The franchisee benefits from a ready-made business idea. Signup and view all the answers

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

A private limited company has limited liability, while a public limited company has unlimited liability. Signup and view all the answers

What is a key disadvantage for the franchisee in a franchising arrangement?

The franchisee has to pay significant upfront costs. Signup and view all the answers

What is a key characteristic of a merit good?

It is a type of good that is used by the population when needed. Signup and view all the answers

What is the primary characteristic of a sole proprietorship?

A single person owning and operating the business Signup and view all the answers

What is a key disadvantage of sole proprietorship?

The owner must perform all tasks Signup and view all the answers

What is the primary advantage of a private limited company over a sole proprietorship?

Limited liability for owners Signup and view all the answers

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

The ability to issue public shares Signup and view all the answers

What is the primary characteristic of a franchise business model?

A business model where one party grants another party the right to operate a business Signup and view all the answers

What is the primary advantage of a partnership over a sole proprietorship?

Shared ownership and liability Signup and view all the answers