Higher Business Management -
Understanding Business Premium 2026–2027
Exam Study Guide: Updated Questions,
Fully Explained Solutions, Concept
Reinforcement & Strategic Revision Support
Description
The Premium 2026–2027 Exam Study Guide
is a carefully developed resource designed to
support students in achieving stronger exam
performance through structured practice, clear
explanations, and focused revision
techniques.
This guide provides more than just practice
material—it offers a guided learning
approach that helps you understand key
concepts, apply them correctly, and improve
your ability to handle exam questions with
confidence. By combining updated
questions with well-
,Primary sector - ANSWER✅Consists of businesses that are involved in the extraction
and exploitation of natural resources
Secondary sector - ANSWER✅Consists of businesses that are involved in
manufacturing and construction, by taking the natural resources provided by the primary
sector and turning them into goods to be sold later
Tertiary sector - ANSWER✅Consists of businesses and organisations that are
involved in providing services rather than goods
Quaternary sector - ANSWER✅Consists of businesses providing information and
knowledge-based support services, such as ICT, consultancy and research and
development services
Private sector - ANSWER✅- Consists of businesses that aim primarily to maximise
profits and that are owned by private individuals
- Includes all profit-making businesses from small local businesses to multinational
companies
Public sector - ANSWER✅Consists of government-owned organisations and agencies
which aim to provide a service to society
Third sector - ANSWER✅- Consists of organisations that have been set up to provide
goods or services to benefit others
- Includes charities, voluntary organisations, social enterprises and democratic
enterprises
Private limited companies - ANSWER✅- Owned by shareholders, who have one or
more shares in the business
- Shareholders have limited liability
- Shares are sold privately to investors whom the business knows
- Aim to maximise profits, grow and increase market share
- Controlled by a Board of Directors who are managed by a managing director
- Have to produce documents called the Memorandum of Association and Articles of
Association
Limited liability - ANSWER✅The owners' personal possessions are not at risk if the
business gets into debt, as they only lose their investment in the company
Advantages of a private limited company - ANSWER✅- Shareholders have limited
liability
- Capital can be raised by selling shares
- They do not have to disclose most of the information that public limited companies
have to provide
- Ownership is not lost to outsiders as all shareholders are known
, Disadvantages of a private limited company - ANSWER✅- Profits have to be split with
shareholders by issuing dividends
- Legal process required to set up the company
- Shares cannot be sold publicly on the Stock Exchange, so there is a limited source of
capital available
- Financial accounts can't be kept private as they must be shared with the Companies
House and are therefore made publicly available
- Larger companies are more difficult to manage effectively
Public limited companies - ANSWER✅- Owned by shareholder who have limited
liability
- Must have a minimum of £50,000 share capital (usually a large company)
- Controlled by a Board of Directors
- Can sell their shares publicly through the stock market
- They aim to dominate the market, increase market share and market value
Advantages of public limited companies - ANSWER✅- Shareholders have limited
liability
- Large amounts of finance can easily be raised through the public sale of shares
- Banks are very willing to lend PLCs money due to their size and reputation, as they
are seen as less risky
- Organisation has financial stability, enabling it to develop and expand
Disadvantages of public limited companies - ANSWER✅- Dividends are shared with
many shareholders
- Control of the business can be lost as anyone can buy shares on the stock market
- Annual accounts have to be published
- Setting up a PLC is costly and complicated
- Employees can feel alienated from those at the top
- They can grow so large that they cannot be managed effectively
- Decision making can be slow due to its size
Franchise - ANSWER✅A business run by one firm under the name another
Franchiser - ANSWER✅- Original business that gives franchisees licenses to sell
goods or services under their brand name
- Aims to grow, increase market share and maximise profits
Franchisee - ANSWER✅Owner of each individual branch of the franchise
Examples of franchises - ANSWER✅- McDonald's
- Subway
- Papa John's
- Red Driving School
Understanding Business Premium 2026–2027
Exam Study Guide: Updated Questions,
Fully Explained Solutions, Concept
Reinforcement & Strategic Revision Support
Description
The Premium 2026–2027 Exam Study Guide
is a carefully developed resource designed to
support students in achieving stronger exam
performance through structured practice, clear
explanations, and focused revision
techniques.
This guide provides more than just practice
material—it offers a guided learning
approach that helps you understand key
concepts, apply them correctly, and improve
your ability to handle exam questions with
confidence. By combining updated
questions with well-
,Primary sector - ANSWER✅Consists of businesses that are involved in the extraction
and exploitation of natural resources
Secondary sector - ANSWER✅Consists of businesses that are involved in
manufacturing and construction, by taking the natural resources provided by the primary
sector and turning them into goods to be sold later
Tertiary sector - ANSWER✅Consists of businesses and organisations that are
involved in providing services rather than goods
Quaternary sector - ANSWER✅Consists of businesses providing information and
knowledge-based support services, such as ICT, consultancy and research and
development services
Private sector - ANSWER✅- Consists of businesses that aim primarily to maximise
profits and that are owned by private individuals
- Includes all profit-making businesses from small local businesses to multinational
companies
Public sector - ANSWER✅Consists of government-owned organisations and agencies
which aim to provide a service to society
Third sector - ANSWER✅- Consists of organisations that have been set up to provide
goods or services to benefit others
- Includes charities, voluntary organisations, social enterprises and democratic
enterprises
Private limited companies - ANSWER✅- Owned by shareholders, who have one or
more shares in the business
- Shareholders have limited liability
- Shares are sold privately to investors whom the business knows
- Aim to maximise profits, grow and increase market share
- Controlled by a Board of Directors who are managed by a managing director
- Have to produce documents called the Memorandum of Association and Articles of
Association
Limited liability - ANSWER✅The owners' personal possessions are not at risk if the
business gets into debt, as they only lose their investment in the company
Advantages of a private limited company - ANSWER✅- Shareholders have limited
liability
- Capital can be raised by selling shares
- They do not have to disclose most of the information that public limited companies
have to provide
- Ownership is not lost to outsiders as all shareholders are known
, Disadvantages of a private limited company - ANSWER✅- Profits have to be split with
shareholders by issuing dividends
- Legal process required to set up the company
- Shares cannot be sold publicly on the Stock Exchange, so there is a limited source of
capital available
- Financial accounts can't be kept private as they must be shared with the Companies
House and are therefore made publicly available
- Larger companies are more difficult to manage effectively
Public limited companies - ANSWER✅- Owned by shareholder who have limited
liability
- Must have a minimum of £50,000 share capital (usually a large company)
- Controlled by a Board of Directors
- Can sell their shares publicly through the stock market
- They aim to dominate the market, increase market share and market value
Advantages of public limited companies - ANSWER✅- Shareholders have limited
liability
- Large amounts of finance can easily be raised through the public sale of shares
- Banks are very willing to lend PLCs money due to their size and reputation, as they
are seen as less risky
- Organisation has financial stability, enabling it to develop and expand
Disadvantages of public limited companies - ANSWER✅- Dividends are shared with
many shareholders
- Control of the business can be lost as anyone can buy shares on the stock market
- Annual accounts have to be published
- Setting up a PLC is costly and complicated
- Employees can feel alienated from those at the top
- They can grow so large that they cannot be managed effectively
- Decision making can be slow due to its size
Franchise - ANSWER✅A business run by one firm under the name another
Franchiser - ANSWER✅- Original business that gives franchisees licenses to sell
goods or services under their brand name
- Aims to grow, increase market share and maximise profits
Franchisee - ANSWER✅Owner of each individual branch of the franchise
Examples of franchises - ANSWER✅- McDonald's
- Subway
- Papa John's
- Red Driving School
