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 Forms of business organization quiz.
The business only employs one person
The business is owned by one person
The firm has a single customer
There is a single firm in the industry.
Owners have limited liability
Shares can be sold to raise capital
Decisions and responsibilities can be shared
The owner has independence
Capital is limited to the owner’s savings and bank loans
Decisions take too long to make
As they are government-owned there is no profit motive
The owners may disagree.
All partners always have limited liability
Shares can be sold on the Stock Exchange
The business survives the death of the partners
The business has access to more capital than a sole trader.
Shares can be issued to raise capital.
Shares can be bought and sold on the Stock Exchange.
All owners of the business have limited liability.
The business continues after the death of shareholders.
It is owned by the government and is in the public sector.
It is owned by shareholders who can sell their shares on the Stock Exchange.
It is quick and easy to set up with few legal formalities.
Its accounts can be kept private, and it receives little coverage in the business
They do not want to remain in the private sector
They want to gain the benefits of limited liability
They want to keep the annual accounts secret
They want to raise additional capital to expand the business.
There can be a loss of control by the original owners as additional shares are sold
Firms in the public sector are often less efficient
If the company were to fail, the shareholders could lose all of their assets
Workers have to be asked for their opinions before major decisions are taken.
They are owned and controlled by the workers.
They are owned by the directors but controlled by the shareholders.
They are owned by shareholders but controlled by directors.
They are owned and controlled by the government.
All co-operatives are only concerned with retailing.
Profits are shared equally amongst members.
They are owned by shareholders.
Workers have no say in decision-making.
It is always much cheaper than setting up a new business venture
There is complete control over important decisions
The business can use its own name in advertisements
The risks of failure are lower as it is buying a well-known business idea.
The business can expand more quickly
The franchisor owns all of the shops
The businesses buying the franchises are certain to be successful
The products sold in each shop will be different.
Expanding a business to all parts of the country
When the government buys all of the assets of a private sector business
When a private limited company applies to become a public limited company
Opening a new division of the business in another country to become a multinational.
the costs of a new project can be split between the companies involved
Manufacturing costs will be divided between the firms in the venture
Joint ventures between firms in different countries can create new market opportunities
Management of the joint venture will never lead to disagreements
In cases where monopolies are likely to occur, public corporations will be best for consumers
In declining industries, public corporations, with government subsidies, would attempt to avoid job losses
By aiming to maximize profits, public corporations will always make money for the government
A public corporation television service could make non-profitable programs.
Here's an interesting quiz for you.