business-ownership 1.6

What is the public sector?

Organisations owned and controlled by the government, such as NHS, Police, Education, and Armed Forces.

What are the aims of the public sector?

1. Provide a service

2. Improve accessibility to others

3. Avoid wasteful duplication of resources.

Name one resource for start-up businesses.

Business Wales - a government-run website providing information and advice for starting or growing a business.

What is the role of commercial banks for small businesses?

They offer dedicated services, advice on constructing business plans, and gaining financial approval.

What does The Prince's Trust do?

Works with 18 to 30-year-olds to turn ideas into reality through training, mentoring, and funding.

What is British Chambers of Commerce?

Provides continuous advice and support for local businesses and advocates for business interests.

What characterizes the private sector?

Businesses run by private individuals, such as sole traders, partnerships, Ltd.’s, and Plc.’s.

What is meant by unlimited liability?

Owners are responsible for all business debts, which may require personal belongings to be forfeited.

What defines a sole trader?

A business owned by one person who has unlimited liability.

List one advantage of being a sole trader.

Can keep all profit without needing to share.

What is a disadvantage of being a sole trader?

Unlimited liability means responsible for all debts of the business.

Describe partnerships.

A business owned by 2 to 20 people with shared responsibilities and unlimited liability.

What is one advantage of forming a partnership?

Can raise more capital than a sole trader.

What is one disadvantage of partnerships?

Partners may disagree, slowing down decision-making.

What is a Deed of Partnership?

A legal document that outlines the rules of the partnership including profit sharing and responsibilities.

What are dividends?

The share of profits distributed to shareholders in limited companies and co-operatives.

Define limited liability.

Owners are not responsible for business debts beyond their investment.

What are charities?

Organizations set up to help disadvantaged individuals, not established for profit but can earn surpluses.

What is the purpose of social enterprises?

Operate for the benefit of the community or as a charity.

Who owns a co-operative?

Customers, workers, or producers who share a common purpose.

Name an example of a private limited company.

A business that is owned by shareholders with limited liability and shares not available to the public.

What is a public limited company (Plc)?

Businesses owned by shareholders with shares that are publicly available, often traded on the Stock Exchange.

What is an advantage of a public limited company?

Ability to raise capital by selling shares to the public.

Name a disadvantage of public limited companies.

Cost of setting up and requirement to publish accounts.

What is the significance of the term 'unincorporated business'?

It refers to businesses like partnerships and sole traders where owners have unlimited liability.

Explain why a business might want to move from a sole trader to a partnership.

Access to more capital and shared responsibilities.

What are the advantages of limited liability for business owners?

Owners will not lose personal possessions if the business fails.

What is the difference between public and private sectors regarding funding?

Public sector does not require taxes to fund operations, while private sector operates on profit incentives.

What does 'risk-reward' mean in business?

The potential benefits of investing (reward) against the possible losses (risk).

What is the main characteristic of sole traders?

They have complete control and independence over their business decisions.

Why might businesses in the public sector not be affected by recession as much?

They provide essential services that remain in demand.

What is one method charities use to raise funds?

Voluntary donations and operating retail outlets.

Give an example of how social enterprises benefit communities.

By providing jobs and services that enhance the local economy.

Define the term 'entrepreneurs'.

Individuals who create and run businesses, often taking on financial risks.

What is the importance of consultation in partnerships?

It helps ensure that decisions consider various perspectives and expertise.

What might be a consequence of disagreements among business partners?

Potential delays in decision-making and strategy execution.

What is a key advantage of a public limited company over a private limited company?

Greater ability to raise capital from the public through stock sales.

What could be a reason for a business to remain a sole trader rather than form a partnership?

To maintain independence and control over business operations.

How do co-operatives involve their members in decision-making?

Members share opinions and are consulted on significant decisions affecting the business.

What are two benefits of a partnership compared to a sole trader?

1. Shared responsibility reduces individual workload.

2. Access to diverse skills and expertise.

What essential information does a Deed of Partnership include?

Names of partners, profit sharing, duties, and conditions for ending the partnership.

Why might a private limited company choose to go public?

To increase its capital by selling shares to the general public.

How does limited liability protect business owners?

Owners are only liable for debts up to the amount they invested in the business.

What is one downside of needing to disclose company accounts?

Competitors can gain insight into the financial health of the business.

Name a key benefit of having specialized management in a business.

Efficient operation as managers focus on areas of expertise.

What does 'divorce of ownership and control' refer to in a business?

Owners may not manage daily operations and can delegate responsibilities.

How does the principle of sustainability apply to social enterprises?

They operate in ways that benefit the economy, society, and the environment.

How can social enterprises achieve a 'triple bottom line'?

By focusing on social, environmental, and financial returns.

What are the typical concerns of stakeholders regarding businesses?

Financial performance, ethical practices, and social responsibility.

What role does the stock exchange play for public limited companies?

Facilitates the buying and selling of shares to and from the public.

How is capital raised in a private limited company?

By selling shares to invited shareholders.

What is one potential issue with having a separate management team?

Risks arise if the management does not align with the owners' goals.

Describe the responsibilities of partners in a partnership.

Share management duties, make collective decisions, and handle finances.

What are two common challenges faced by partnerships?

1. Disagreements among partners.

2. Risk of one partner not contributing equally.

What is the legal status of a charity compared to a for-profit business?

Charities are not established for profit and focus on social causes.

How can charities diversify their income streams?

By running retail outlets in addition to relying on voluntary donations.

What is the advantage of maintaining control in a partnership?

Decisions can be made swiftly without external pressures.

How does public accountability impact limited companies?

They must uphold transparency by publishing financial information.

What is one major hurdle faced when establishing a public limited company?

The requirement of a minimum share capital of £50,000.

How does market fluctuation impact private vs. public sector businesses?

Public sector businesses are often less affected due to stable demand for services.

How can entrepreneurial ventures contribute to job creation?

By launching new businesses that employ local talent and services.

What type of relationship can emerge from partnerships?

Mutually beneficial collaborations that leverage participants' strengths.