A sole trader is a business that is owned and managed by one person. People operating a sole trader business work for themselves and are responsible for all business activities and decisions involved in running the business.

A sole proprietor. The terms 'sole trader' and 'sole proprietor' are synonymous.

Unlimited liability is when an individual is personally responsible for all the actions of their business. For a sole trader there is no distinction between the individual and the business. This means that the individual is personally responsible for their business losses and problems. For instance, if a sole proprietor borrows money from a bank and cannot repay their debt, they may risk losing personal possessions.

D.

B.

• Flexible working hours.

• Ability to make all decisions without having to report to a manager. 

• Being 'your own boss'. 

• Direct relation to the market and clients. 

No, this is not true. A sole trader has the freedom to make all decisions on their own without the involvement of a manager or other team members. However, this does not mean that a sole trader will always make the correct decision for their business. It is easy to get demotivated, lack appropriate time management skills and become disorganized when you are working without supervision and the guidance of others.

No, as a sole trader it is possible to hire employees. However, it is the sole trader's responsibility to make the right decisions when hiring help, as they are personally liable for all the operations and actions of their business.

As a sole trader, it is possible to borrow money from a bank or other financial institutions. However, it could be disadvantageous to do this since they often charge high interest rates. Banks do this because they are worried about the sole trader being able to repay their debts in case of failure.

B.

No, the sole trader is individually and solely responsible for all the actions and decisions they make.

One of the advantages of a sole trader is that they can set their schedule and work flexibly. However, this can result in the sole trader having to work long hours and not being able to take any holidays.

Limited liability ensures that the personal assets of the owners and shareholders of a company are safe. If the company were to experience financial troubles, shareholders would only lose up to the amount they originally invested in the company when they bought shares. Limited liability ensures that their personal belongings are kept safe, even if the company is struggling financially.

In limited liability companies, the company is a separate legal entity to its owners. This means that they are not personally responsible for the debts of the company. In an unlimited liability business, the owner is personally responsible for the debts of the business. This means that if the business were experiencing financial difficulties, the personal assets of the owner are at risk.

A dividend is a part of the firm's profits that is paid to its shareholders. The more shares an owner has in the company, the more dividend payments they receive.

No. Dividends are paid based on the profits the company has made. This does not mean that shareholders receive the value of their original investment each time a dividend is paid to them.

D.

A limited liability company can own property and a sole proprietorship cannot

Private limited companies can decide who they sell shares to but public limited companies cannot

B.

• It is expensive to set up if the company is just starting up. 

• You must pay your shareholders dividends. You cannot keep all the profits your company makes.

• Takeovers are also a possibility for public limited companies, which could lead to a loss of control for the current owners. 

D.

• Easier access to capital and resources (compared to a sole proprietorship).

• The business can raise finances through share capital. 

• Flexibility when it comes to company management.

• The potential to benefit from economies of scale. 

A non-profit organization is a social enterprise that has social aims and operates to benefit a community or society as a whole. The mission of non-profit organizations can range from community service projects, childcare, recycling companies, apprenticeship programs, etc.

A non-profit is an organization that is not set up to make profits. For non-profit organizations, the goal is not to maximize profits. Rather, their objectives are to operate for the benefit of a community or society as a whole.

• Philanthropic organizations

• Advocacy organizations

• Mutual benefit organizations

• Public corporations

• Public services

• Municipal services 

The mission and purpose of non-profit organizations are to create social benefits, also known as social capital. By creating social capital, non-profit organizations aim to solve an existing problem or issue in order to advance humanity in a certain way.

A potential problem that could arise as a result of privatization is short-term unemployment.

C.

A.

C.

A public corporation is an enterprise owned by the state but offers products and services to both private and public sectors. A public service includes organizations that provide services to the entire nation. Public corporations include the BBC or Channel 4 television. Public services include the NHS or the HMRC.

D.

These are services offered by local governments and councils. Examples include libraries, street lighting, and municipal parks and recreation.

C.

A franchise is a business, which has an established owner, that sells the rights of operating the business to a franchisee. Franchising is a two-party contract. The franchisor provides a set of information to the franchisee on how to run the business. The franchisee essentially receives the whole 'business package' from the franchisor.

A franchisor is an established business that sells the rights to its name. The franchisor also provides training and input to the franchisee on how to run the daily operations and manage the franchise. The franchisor receives royalty payments from the franchisee.

The franchisee is the party that purchases the rights to the franchise. Upon purchase, they receive the right to the business name and are allowed to operate their business with the same business model as the franchisor. The franchisee is also granted the right to use the name, branding and marketing as the franchisor.

A royalty payment or royalty fee is a fee the franchisee must pay to the franchisor. This fee is usually calculated based on a percentage of the franchisee's yearly sales and profit. They must pay this fee in order to continue operating as a franchise.

In a franchising system, individual business owners are a tightly knit group, whose operations are directed and controlled by the franchisor.