Y9 Business Studies Exam on Sole Traders

Podcast

Play an AI-generated podcast conversation about this lesson

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. Signup and view all the answers

Study Notes

Exam Instructions

Exam date: 2024
Year level: Y9
Subject: Business Studies
Duration: 1.5 hours (12.00 – 13.30)
Total marks: 100
Exam format: Written exam
Allowed materials: Black or dark blue ballpoint pen, HB pencils (for notes, diagrams, or graphs only), highlighter, eraser/rubber.
Prohibited materials: Dictionaries.
Instructions:
- Fill in details on the exam paper (date, class year, nickname) in the space provided.
- Do not write in the last three columns of the table.
- Use black or dark blue ink.
- Do not use erasable pens or correction fluid; neatly cross out mistakes.
- Use a rubber to remove pencil marks.
- Fill required info about the business type

Sole Traders

Sole traders are the most common type of business organization.
Sole traders own and operate a business by themselves.
Legal regulations for sole traders:
- Register with and submit accounts to the government tax office.
- Register the business name with the Registrar of Business Names.
- Follow industry-specific laws (health and safety, licensing, taxi operation, alcohol sales, etc).
Advantages of sole traders:
- Few legal regulations at start-up.
- Complete control over the business.
- Freedom to set own hours, holidays, and pricing structure.
- Close customer relationships and quick responses to customer needs.
- Keep all profits after taxes.
Disadvantages of sole traders:
- Owner responsible for all business debts (unlimited liability).
- No one to discuss business with (as the owner).
- Difficulty expanding due to limited funds.
- Reliance on owner's savings, profits, or small loans.
- Business ends with the owner's death or illness.
- Lack of continuity of business operations.

Partnerships

Partnerships are businesses owned and operated by two or more people.
Key elements of a partnership agreement:
- Amount of capital invested by each partner.
- Tasks to be undertaken by each partner.
- How profits will be shared
- How long the partnership will last
- Contingency plans for absence, retirement, or new partners
Advantages of partnerships:
- More capital available
- Shared responsibilities and expertise
- Motives to work hard, profit sharing
Disadvantages of partnerships:
- Unlimited liability for partners.
- Disagreements in decision-making.
- Potential loss of business if one partner leaves or dies.
- Legal responsibilities in forming a partnership.

Private Limited Companies

Key benefits:
- Shared ownership: Can involve multiple investors.
Limited liability: The owners are only liable for the amount invested.
Continuity: The business continues even if an owner dies or leaves.
Financial capacity: Access to more financing options.
Disadvantages:
- Complicated formation process.
- Strict regulations.
- Additional paperwork and transparency requirement, including audited annual reports.
- Higher accounting cost: Public access to accounts.

Leadership Styles

Laissez-faire: Leader delegates decisions to employees; minimal intervention except in necessary situations.
Business activities are affected by external parties (e.g., pressure groups).
Pressure Groups: Groups try influencing behavior of businesses

Roles of Managers

Delegation: Assign tasks to employees to make them primary decision-makers.
Support & Guidance: Facilitate employee performance through mentorship and support.
Communication: Facilitate real-time communication and feedback.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Prepare for your Year 9 Business Studies exam focused on sole traders. This quiz will cover key concepts, legal regulations, and the responsibilities of sole traders in business. Understand the essentials to excel in your exam!