● 1.

What is a disadvantage of being sole trader?

○ A.
○ Limited capacity to expand business
○ B.
○ Own boss with complete control
○ C.
○ Higher costs of establishing
○ D.
○ Sale of shares is expensive
●
2.
What is meant by franchise?
○ A.
○ Any group or individual person with a direct interest in the performance and
activities of business
○ B.
○ People who are potential buyers of a product or service
○ C.
○ A business based upon the use of the brand names, promotional logos and
trading methods of an existing successful business
○ D.
○ Owners of a limited company that buy shares which represent part ownership of
a company
●
3.
What is an Annual General Meeting (AGM)?
○ A.
○ A decision taken by a manager or company because of the moral code observed
in that firm
○ B.
○ A group of employers join together to give benefits to their members
○ C.
○ The result of an agreement between countries to use the same currency for all
business and other transaction
○ D.
 ○ A legal requirement for all companies in which they vote on who they want to be
on the Board of Directors for the coming year. All shareholders may attend
●
4.
What is an advantage of franchising to the franchisor?
○ A.
○ The franchisee keeps profits from the outlet
○ B.
○ The franchisor pays for advertising
○ C.
○ The franchisor does not manage these new outlets
○ D.
○ Banks are often willing to lend to franchisees due to relatively low risk
●
5.
What is a limited liability?
○ A.
○ Written and legal agreement between business partners
○ B.
○ The owners of a company – the shareholders – cannot be held responsible for
the debts of the company they own
○ C.
○ One that does not have a separate legal identity
○ D.
○ Owners of a limited liability
When you start a business, you must make informed decisions. You must choose the appropriate form of business in
which you want to participate. Some examples of this include sole proprietorship, corporation, partnership, cooperative,
and limited liability. You will need to know one of the disadvantages of a sole trader business and one of the advantages of
a partnership firm. You certainly must take this great quiz.

Questions and Answers

● 1.
The best definition of a sole trader form of business organization is:
○ A.
○ The business only employs one person
○ B.
○ The business is owned by one person
○ C.
○ The firm has a single customer
○ D.
○ There is a single firm in the industry.
●
2.
One of the claimed advantages of a sole trader business is that:
○ A.
○ Owners have limited liability
○ B.
○ Shares can be sold to raise capital
○ C.
○ Decisions and responsibilities can be shared
○ D.
○ The owner has independence
●
3.
One of the disadvantages of a sole trader business is that:
○ A.
○ Capital is limited to owner’s savings and bank loans
○ B.
○ Decisions take too long to make
 ○ C.
○ As they are government owned there is no profit motive
○ D.
○ the owners may disagree.
●
4.
One of the advantages of a partnership form of business organisation is that:
○ A.
○ All partners always have limited liability
○ B.
○ Shares can be sold on the Stock Exchange
○ C.
○ The business survives the death of the partners
○ D.
○ The business has access to more capital than a sole trader.
●
5.
Which of the following is NOT a feature of a private limited company?
○ A.
○ Shares can be issued to raise capital.
○ B.
○ Shares can be bought and sold on the Stock Exchange.
○ C.
○ All owners of the business have limited liability.
○ D.
○ The business continues after the death of shareholders.
●
6.
Which of the following statements best applies to a public limited company (PLC)?
○ A.
○ It is owned by the government and is in the public sector.
○ B.
○ It is owned by shareholders who can sell their shares in the Stock Exchange.
○ C.
○ It is quick and easy to set up with few legal formalities.
 ○ D.
○ Its accounts can be kept private and it receives little coverage in the business
●
7.
The main reason why the owners of many private limited companies convert into
public limited companies is that:
○ A.
○ They do not want to remain in the private sector
○ B.
○ They want to gain the benefits of limited liability
○ C.
○ They want to keep the annual accounts secret
○ D.
○ They want to raise additional capital to expand the business.
●
8.
One of the main drawbacks of many public limited companies is that:
○ A.
○ There can be a loss of control by the original owners as additional shares are sold
○ B.
○ Firms in the public sector are often less efficient
○ C.
○ if the company were to fail the shareholders could lose all of their assets
○ D.
○ workers have to be asked for their opinions before major decisions are taken.
●
9.
Which of the following statements about most public limited companies is true?
○ A.
○ They are owned and controlled by the workers.
○ B.
○ They are owned by the directors but controlled by the shareholders.
○ C.
○ The are owned by shareholders but controlled by directors.
○ D.
 ○ They are owned and controlled by the government.
●
10.
Which of the following statements about co-operative business organizations is true?
○ A.
○ All co-operatives are only concerned with retailing.
○ B.
○ Profits are shared equally amongst members.
○ C.
○ They are owned by shareholders.
○ D.
○ Workers have no say in decision-making.
●
11.
One of the reasons for a business buying a franchise is because:
○ A.
○ It is always much cheaper than setting up a new business venture
○ B.
○ There is complete control over important decisions
○ C.
○ The business can use its own name in advertisements
○ D.
○ The risks of failure are lower as it is buying a well known business idea.
●
12.
One of the advantages to a business of selling a franchise is that:
○ A.
○ The business can expand more quickly
○ B.
○ The franchisor owns all of the shops
○ C.
○ The businesses buying the franchises are certain to be successful
○ D.
○ The products sold in each shop will be different.
●
13.
The best definition of nationalization is:
○ A.
○ Expanding a business to all parts of the country
○ B.
○ When the government buys all of the assets of a private sector business
○ C.
○ When a private limited company applies to become a public limited company
○ D.
○ Opening a new division of the business in another country to become a multinational.
●
14.
All of the following are claimed advantages of joint ventures except:
○ A.
○ the costs of a new project can be split between the companies involved
○ B.
○ Manufacturing costs will be divided between the firms in the venture
○ C.
○ Joint ventures between firms in different countries can create new market
opportunities
○ D.
○ Management of the joint venture will never lead to disagreements
●
15.
All of the following are claimed advantages of public corporations except:
○ A.
○ In cases where monopolies are likely to occur, public corporations will be best for
consumers
○ B.
○ In declining industries, public corporations, with government subsidies, would attempt
to avoid job losses
○ C.
○ By aiming to maximise profits public corporations will always make money for the
government
○ D.
○ A public corporation television service could make non-profitable programmes.