Y9 Business Studies Exam on Sole Traders

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Questions and Answers

There are three legal regulations which must be followed, what are they?

The owner must register with, and send annual accounts to, the Government Tax Office. (correct)
In some industries, the sole trader must observe laws, these include health and safety laws and obtaining a licence to sell alcohol or operate a taxi. (correct)
The name of the business is significant. The name must be registered with the Registrar of Business Names. (correct)

What are three advantages and disadvantages to sole trades of running their own business?

Advantages:

Few legal regulations when setting up the business
Complete control over the business
Freedom to choose holidays, work hours, pricing, and employees
Close contact with customers
Ability to keep all profits after paying tax
No requirement to share business information with anyone besides the Tax Office

Disadvantages:

No one to discuss business matters with
Full responsibility for debts, including unlimited liability
Limited financial resources for expansion
No continuity after the owner's death
No one to take control in case of illness

What five main points would be important to include in a written partnership agreement which would benefit both parties?

Amount of capital invested by each partner
Tasks to be undertaken by each partner
How profits will be shared
Duration of the partnership
Arrangements for absence, retirement, and the addition of new partners

Name three types of advantages that have become clear to Mike regarding his partnership with Dave?

<ul> <li>More capital available for investment</li> <li>Shared responsibilities and workload</li> <li>Increased motivation due to shared profits and losses</li> </ul> Signup and view all the answers

Name three types of disadvantages that have Dave worried about regarding their partnership?

<ul> <li>Unlimited liability: Creditors can force partners to sell personal assets to cover business debts.</li> <li>Lack of a separate legal identity: The partnership dissolves if one partner dies, and there is no clear succession plan.</li> <li>Potential for disagreements or dishonesty: One partner's actions can negatively impact the entire business.</li> </ul> Signup and view all the answers

What are three benefits of forming a private limited company?

<ul> <li>Access to larger capital through the sale of shares</li> <li>Limited liability for shareholders</li> <li>Ability to maintain control even with shares sold to others</li> </ul> Signup and view all the answers

What are three disadvantages of forming a private limited company?

<ul> <li>Complex legal requirements and paperwork</li> <li>Public access to company accounts</li> <li>Requirements for formal meetings and procedures</li> </ul> Signup and view all the answers

Define 'laissez-faire leadership style'.

A leadership approach that emphasizes autonomy and minimal supervision. Leaders intervene only when requested or when a problem arises. Signup and view all the answers

Where does 'laissez-faire' come from and what does it mean?

The term 'laissez-faire' is French and means 'allow to do'. It refers to a philosophy of non-interference, allowing individuals and businesses to operate freely with minimal government intervention. Signup and view all the answers

Identify two roles of a manager.

<ol> <li>Delegation: Empowering employees to make decisions and take ownership of projects.</li> <li>Support: Providing guidance, training, and resources while fostering trust in employees' abilities.</li> </ol> Signup and view all the answers

Outline one external cost and one external benefit Millie's business activities might create.

<ul> <li>External cost: Environmental damage, including oil spills, health risks, and pollution caused by oil extraction and production.</li> <li>External benefit: Improved education and knowledge, leading to a more informed and capable society.</li> </ul> Signup and view all the answers

Explain two methods of IT based communication Millie might use with its employees.

<ol> <li>Two-way radios: Real-time communication for immediate feedback and coordination, enhancing safety and productivity.</li> <li>Satellite communication: Reliable communication for remote locations and offshore operations, but can be expensive.</li> </ol> Signup and view all the answers

Explain three ways a pressure group might try to influence business decisions. Which way do you think is likely to be most effective? Justify your answer.

Many pressure groups try to influence businesses to behave more ethically. (B), Boycotting can encourage customers to stop buying a company's product. (C), Pressure groups can use media coverage to create bad publicity for a company. (D) Signup and view all the answers

Flashcards

Sole Trader

A legal structure where one person owns and operates a business, taking on all responsibilities and profits.

Sole Trader Regulation 1: Tax Registration

The owner must register their business and submit annual financial reports to the government tax office.

Sole Trader Regulation 2: Business Name Registration

The business name must be registered with a designated authority to legally operate.

Sole Trader Regulation 3: Industry-Specific Regulations

Depending on the industry, specific regulations and licenses might be required, like health and safety checks or alcohol sales permits.