Types of business organisation

Identify and explain two advantages to DWP that arise from becoming a private limited company.

Feb/March 2016

Explain two advantages and two disadvantages associated with being a sole trader.

Feb/March 2021

All questions are about Charly setting up a new business.

Feb/March 2025

Country S is going through an economic boom. In this period, business profits have risen and unemployment has dropped. The only problem is inflation. All Active is a private limited company. It runs 20 sport and fitness clubs in country S. The Managing Director said: ‘This is a good time to expand by opening 5 more clubs. We will need to recruit more employees.’ He cannot decide whether it would be an advantage for All Active to become a public limited company.

May/June 2015

Si and Ramon are friends who plan to start a photography business. They would photograph weddings, birthdays and other special events. The business is to be organised as a partnership. From their primary market research, Si thinks demand is sufficient. Ramon has drawn up a business plan showing that they require $8000 for a shop and $4000 for equipment. They intend to spend $500 on promotion, but they disagree about which method would be best.

May/June 2015

Alkin is a multinational company that manufactures breakfast food products, including several leading cereal brands. It intends to begin selling in country Z, a rapidly expanding market. Alkin plans to create a joint venture with a local business based in country Z. ‘Effective communication will be vital to our success, but I believe there are many advantages in expanding in this way’ said Alkin’s Managing Director. The Government of country Z is concerned about the effect that multinational companies like Alkin may have on consumers.

May/June 2015

Laws introduced by governments can affect businesses, including minimum wage laws. Identify and explain two legal controls (other than minimum wage laws) that could affect Chris’s new business.

May/June 2015

Nuwan is a sole trader. He owns a specialist sports shop that sells a broad selection of cricket and tennis products. His 3 employees are trained to deliver strong customer service. Nuwan is happy that the economy is expanding, but he is concerned that interest rates could rise. He thinks his small business has benefits when compared with large retailers. Nuwan wants to raise profit margins and believes the most effective way to achieve this is to cut costs.

May/June 2016

QCH is a multinational business that produces a range of luxury cars. In the previous year, it earned a profit of $700m. One of QCH’s objectives is to break into new markets. QCH plans to begin making cars in country C, which is a fast-growing economy. The Finance Director said: ‘Meeting customer needs matters. We could create a joint venture or establish our own factory. Either choice would be costly, at $800m. I believe QCH’s move into country C could also benefit other businesses there.’

May/June 2017

Five years earlier, Manisha began baking cakes at home. These cakes are sold for celebrations, including weddings and birthdays. She now runs a small shop and employs 3 people. Product quality is vital for her business. Manisha said: ‘I have benefited from the economic boom but I did not expect demand to increase by 500% each year. Somehow I have managed to cope with higher interest rates and all the challenges of being a sole trader. The business is profitable at last but I have to work every day.’ A friend has offered to become Manisha’s business partner.

May/June 2017

Variable cost = $0.80 for each chocolate bar. Predicted sales come to 100 000 chocolate bars each week at a price of $1 per unit.

May/June 2017

Identify and explain one advantage and one disadvantage to AH of trading as a business partnership rather than as a private limited company.

May/June 2018

George has spent 10 years working in a small flower shop. He dislikes his manager’s autocratic leadership style and wants to move on. He must choose between setting up his own business and buying a BunchesRUs franchise. The franchise would cost him $5000$, but BunchesRUs would supply training and support. Whichever route he takes, George will need finance and will have to recruit 2 part-time employees. George understands that developing customer relationships will matter to his business’s success.

May/June 2019

DCN is a major chemical firm. It employs 8 000 workers in its 3 factories. DCN has agreed to form a joint venture with a glass making business to create a new kind of packaging that is environmentally friendly. DCN’s Managing Director commented: ‘A joint venture has drawbacks. The two businesses use different leadership styles and have different business objectives. We will need to consider how to remove any possible communication barriers.’

May/June 2021

Explain two advantages and two disadvantages of forming a private limited company.

May/June 2021

Tom is considering resigning from his job so that he can become an entrepreneur. He and his sister intend to set up a window cleaning business. Tom has been advised that new businesses face a higher chance of failure than established ones. He must choose whether a partnership would be a suitable type of business organisation for the new venture. He has worked out that the business will require $700 as start-up capital. Tom also understands that every choice he makes carries an opportunity cost.

May/June 2022

Explain four characteristics that an entrepreneur needs in order to be successful.

May/June 2023

Explain two advantages and two disadvantages for Philip of converting PF from a sole trader business into a private limited company.

May/June 2025

Explain two advantages and two disadvantages to Jemi of taking out a franchise.

May/June 2025

Tebo has only recently lost his job as a car mechanic. He is thinking about starting up his own business. Although he has no management experience, he knows that cash flow management will be essential to the business’s success. Tebo is also considering whether to apply for a FIXIT franchise. This franchise would cost $15 000, which would use up all of his savings. FIXIT is a car repair franchise, and it has 36 franchisees.

Oct/Nov 2015

Identify and explain one benefit and one drawback for CC of operating as a public limited company.

Oct/Nov 2015

Moeen and Ali are planning to set up a small luxury hotel in the centre of a city in country R. They have a budget of $30 000 to cover every cost. After investigating different forms of business organisation, as shown in Table 2, Moeen believes the hotel ought to be a private limited company. If the business is to succeed, Ali knows that selecting the right location will matter. He cannot decide whether to employ full-time staff or part-time staff.

Oct/Nov 2016

Identify and explain 1 benefit and 1 drawback for Ghaziz and Jasmin of operating as a business partnership.

Oct/Nov 2016

Identify and explain two likely reasons why Bethany wants the business to stay small.

Oct/Nov 2016

Identify and explain two advantages and two disadvantages of GT operating as a public limited company.

Oct/Nov 2018

GOP is an oil producer in country X. It is a public corporation. GOP intends to construct a 200km pipeline across the country, and it will use retained profits to finance the project. Government planning permission will be required for the pipeline. Environmental pressure groups are worried. A spokesperson for GOP stated: ‘GOP’s objectives are unlike those of businesses in the private sector. This pipeline will generate 2000 skilled construction jobs and cut the need for other businesses to import oil.’

Oct/Nov 2019

Identify and explain two differences between: (i) MF and unincorporated businesses: (ii) MF and public sector organisations:

Oct/Nov 2019

Identify and explain two possible reasons behind Richard’s wish to expand RR.

Oct/Nov 2019

Lola and Raul run a business partnership. They use job production to create a range of hand-printed products, including t-shirts, bags and posters. Most of their customers are tourists. Lola designs and prints all the products at the back of a small shop. Raul looks after sales and finance. Output is slow and Lola finds it hard to match demand. Raul wants to raise output. One possible way to do this is to add some machinery to the process. Raul also wants to create a website.

Oct/Nov 2020

Explain two reasons why PPE may stay small.

Oct/Nov 2021

Explain two advantages and two disadvantages that PH would have as a public limited company.

Oct/Nov 2023

Explain four ways in which a partnership differs from a limited company.

Oct/Nov 2023

Explain two advantages and two disadvantages of a business operating as a private limited company.

Oct/Nov 2025

Explain two reasons why customers might choose to buy from ES instead of one of its competitors.

Oct/Nov 2025