IGCSE Business Unit 1 Exam| Questions and Answers 100% Solved| Latest Update Graded A+
Problems of business growth and how to overcome them -Larger business is harder to
control- Operate business in small units
-Poor communication- Operate business in small units or use newest IT technology
-Expansion is expensive so business will be short in finance- Expand slowly and ensure sufficient
long-term finance is available
-Integrating with a business is hard- Introducing different styles of management requires good
communication with the workforce, they need to understand why it is happening
Why do some businesses stay small -The type of industry the business operates in- Firms in
industries that offer specialised products or personal services. It would be difficult for them to
do this if they expanded
-Market size- if the market size is small than a business which operates in that market is likely to
remain small
-The owner's preference- Owner might want to avoid the stress and worry of running a large
company
Why some businesses fail -Poor management
-Failure to plan for change
-Poor financial management
-Over-expansion
-Risks of new business startups
Sole trader Sole trader is a business owned by one person.
Liability The state of being responsible for something, especially by law.
, Limited liability Limited liability means that the liability of shareholders in a company is only
limited to the amount they invested.
Unlimited liability Unlimited liability means that the owners of a business can be held
responsible for the debts of the business they own. Their liability is not limited to the
investment they made in the business.
Partnership Partnership is a form of business in which two or more people agree to jointly
own a business.
Partnership agreement A partnership agreement is the written and legal agreement
between business partners. Not essential to have it but always recommended.
Unincorporated business An unincorporated business is one that does not have a separate
legal identity. Sole traders and partnerships are unincorporated businesses.
Incorporated business Incorporated businesses are companies that have separate legal
status from their owners.
Shareholders Shareholders are the owners of a limited company. They buy shares which
represent part ownership of a company.
Annual general meeting (agm) An 'agm' is a legal requirement for all companies.
Shareholders may attend and vote on who they want to be on the Board of Directors for the
coming year.
Dividends Dividends are payments made to shareholders from the profits (after tax) of a
company. They are the return to shareholders for investing in the company.
Problems of business growth and how to overcome them -Larger business is harder to
control- Operate business in small units
-Poor communication- Operate business in small units or use newest IT technology
-Expansion is expensive so business will be short in finance- Expand slowly and ensure sufficient
long-term finance is available
-Integrating with a business is hard- Introducing different styles of management requires good
communication with the workforce, they need to understand why it is happening
Why do some businesses stay small -The type of industry the business operates in- Firms in
industries that offer specialised products or personal services. It would be difficult for them to
do this if they expanded
-Market size- if the market size is small than a business which operates in that market is likely to
remain small
-The owner's preference- Owner might want to avoid the stress and worry of running a large
company
Why some businesses fail -Poor management
-Failure to plan for change
-Poor financial management
-Over-expansion
-Risks of new business startups
Sole trader Sole trader is a business owned by one person.
Liability The state of being responsible for something, especially by law.
, Limited liability Limited liability means that the liability of shareholders in a company is only
limited to the amount they invested.
Unlimited liability Unlimited liability means that the owners of a business can be held
responsible for the debts of the business they own. Their liability is not limited to the
investment they made in the business.
Partnership Partnership is a form of business in which two or more people agree to jointly
own a business.
Partnership agreement A partnership agreement is the written and legal agreement
between business partners. Not essential to have it but always recommended.
Unincorporated business An unincorporated business is one that does not have a separate
legal identity. Sole traders and partnerships are unincorporated businesses.
Incorporated business Incorporated businesses are companies that have separate legal
status from their owners.
Shareholders Shareholders are the owners of a limited company. They buy shares which
represent part ownership of a company.
Annual general meeting (agm) An 'agm' is a legal requirement for all companies.
Shareholders may attend and vote on who they want to be on the Board of Directors for the
coming year.
Dividends Dividends are payments made to shareholders from the profits (after tax) of a
company. They are the return to shareholders for investing in the company.
