Types of Organizations and Enterprises

What is the primary purpose of a Deed of Partnership?

Which statement accurately describes unlimited liability in partnerships?

What role do silent partners typically play in a partnership?

What is a key benefit of forming a partnership over being a sole trader?

Why is a Partnership Agreement recommended despite not being mandatory?

What is a defining characteristic of a sole trader?

Which of the following describes a publicly held company?

What is a key disadvantage of non-governmental organizations (NGOs)?

Which type of partnership allows one or more partners to enjoy profits without participating in business operations?

What characterizes the public sector?

What is nationalisation?

What is one primary objective of the private sector?

What feature is common to cooperatives?

Personal funds

They may involve the use of savings

A business may take out a personal loan using their house or other assets as security and invest this money into their money. May persuade family and friends to offer their funds

Owners investing in their own business can be helpful persuading others to invest in their business

Sale assets

Businesses can raise cash by selling assets that they no longer need – can raise large amounts of finance for businesses (capital expenditures)

Leaseback

Selling off assess then leaseback, willing to pay a rental in order to obtain a big chunk of money to sort out a potential problem

Retained Profit

Profits from previous years that have not been paid to shareholders as dividends neither to pay workers. Common for businesses to use retained profit as a source of finance.

(only available to firms making a profit over a period of time)

External sources of Income

Sources

Loan
- Paying off at slightly lower than what you owed early which reduces risk for bank
Share

Crowdfunding

Overdrafts - extra money given by the bank up – allows for flexibility but at high interest

Trade credit - a business-to-business agreement in which a customer can purchase goods without paying cash up front, and paying the supplier at a later scheduled date

Leasing

Microfinance providers – lend money at a high risk with low interest

Business angles – Wealthy individuals that want to invest in a certain sector

Businesses are more likely to use external sources of finance

Low risk with the source of finance making it easier to persuade outsiders to invest or lend money

More difficult to raise money internally

Explore the different types of organizations, including partnerships, sole traders, and various forms of social enterprises. Understand the distinctions between for-profit and non-profit entities, and their roles in the economy. This quiz will test your knowledge on ownership structures and their implications.