Business Management UNIT 3/4 EXAM Questions and Answers
1. Sole Trader ANSWER Businesses owned and operated by a single individual.
Advantage:
-Owner has complete control over all decisions in the business
- The owner has the right to keep all the profits after taxes
Disadvantage:
- Unlimited liability for business debts
- Burden of management and failure all falls to the owner
2. Partnership ANSWER Businesses that are owned by a minimum of 2 and a maximum of 20 people. A
partnership may be made orally or written.
Advantage:
- Combined funds and financials
- Partners can share the workload
Disadvantage:
- Each partner has unlimited liability
- A possibility of disputes
3. Private limited company ANSWER An incorporated business with a minimum of 5 and a maximum of
50 private shareholders, and whose shares are only ottered to those whom the business wishes to have as part
owners.
Advantage:
- Limited liability
- Existence of the business is not threatened by death or removal of one of the directors or shareholders
Disadvantage:
- Higher degree of government control and reporting requirements
- Higher degree of complexity in establishing
4. Public Listed Company ANSWER An incorporated business with a minimum of 5 shareholders, and whose
shares are publicly listed on the ASX (Australian Securities Exchange). E.g. Telstra, Westpac, Woolworths and Virgin
Australia
, Business Management UNIT 3/4 EXAM Questions and Answers
Advantage:
, Business Management UNIT 3/4 EXAM Questions and Answers
- Easier to attract public finance because the business has been incorporated
- Limited liability
Disadvantage:
- Double taxation higher operating fees
- Shareholders may have diverse priorities, which can be diflcult to satisfy
5. Social Enterprise ANSWER A business that operates with the main objective of fulfilling a social need,
rather than making a profit. E.g. The Big Issue, Thank You Water
Advantages:
- Can open up new markets
- Positive impact on the community/society increases reputation of the business
Disadvantage:
- Significant operating costs
- Can be diflcult to focus on both social and financial objectives
6. Government Business Enterprise (GBE) ANSWER A business that is government owned and
operated. GBEs seek to run profitably by controlling costs and selling their goods and services at a price to
cover costs. E.g. VicRoads or Aus Post
Advantages:
+ A GBE is able to carry out government policies, delivering community services in areas where private sector businesses
might hesitate to invest.
+ The provision of healthy competition to businesses operating in the private sector
Disadvantages:
-Ineflciencies caused by government 'red tape'—excessive regulation or rigid conformity to rules.
-There can be less accountability within a GBE, resulting in less productivity and negative attitudes amongst statt.
7. Objective ANSWER A desired goal, outcome or specific result the business wishes to achieve
8. Business Objectives ANSWER - To make a profit
- To increase market share
- To fulfil a market need
1. Sole Trader ANSWER Businesses owned and operated by a single individual.
Advantage:
-Owner has complete control over all decisions in the business
- The owner has the right to keep all the profits after taxes
Disadvantage:
- Unlimited liability for business debts
- Burden of management and failure all falls to the owner
2. Partnership ANSWER Businesses that are owned by a minimum of 2 and a maximum of 20 people. A
partnership may be made orally or written.
Advantage:
- Combined funds and financials
- Partners can share the workload
Disadvantage:
- Each partner has unlimited liability
- A possibility of disputes
3. Private limited company ANSWER An incorporated business with a minimum of 5 and a maximum of
50 private shareholders, and whose shares are only ottered to those whom the business wishes to have as part
owners.
Advantage:
- Limited liability
- Existence of the business is not threatened by death or removal of one of the directors or shareholders
Disadvantage:
- Higher degree of government control and reporting requirements
- Higher degree of complexity in establishing
4. Public Listed Company ANSWER An incorporated business with a minimum of 5 shareholders, and whose
shares are publicly listed on the ASX (Australian Securities Exchange). E.g. Telstra, Westpac, Woolworths and Virgin
Australia
, Business Management UNIT 3/4 EXAM Questions and Answers
Advantage:
, Business Management UNIT 3/4 EXAM Questions and Answers
- Easier to attract public finance because the business has been incorporated
- Limited liability
Disadvantage:
- Double taxation higher operating fees
- Shareholders may have diverse priorities, which can be diflcult to satisfy
5. Social Enterprise ANSWER A business that operates with the main objective of fulfilling a social need,
rather than making a profit. E.g. The Big Issue, Thank You Water
Advantages:
- Can open up new markets
- Positive impact on the community/society increases reputation of the business
Disadvantage:
- Significant operating costs
- Can be diflcult to focus on both social and financial objectives
6. Government Business Enterprise (GBE) ANSWER A business that is government owned and
operated. GBEs seek to run profitably by controlling costs and selling their goods and services at a price to
cover costs. E.g. VicRoads or Aus Post
Advantages:
+ A GBE is able to carry out government policies, delivering community services in areas where private sector businesses
might hesitate to invest.
+ The provision of healthy competition to businesses operating in the private sector
Disadvantages:
-Ineflciencies caused by government 'red tape'—excessive regulation or rigid conformity to rules.
-There can be less accountability within a GBE, resulting in less productivity and negative attitudes amongst statt.
7. Objective ANSWER A desired goal, outcome or specific result the business wishes to achieve
8. Business Objectives ANSWER - To make a profit
- To increase market share
- To fulfil a market need
