IGCSE EDEXCEL BUSINESS EXAM
IGCSE EDEXCEL BUSINESS EXAM GRADED A+
sole trader - correct answer business owned and operated by one
person
unlimited liability - correct answer The owner is personally and fully
responsible for all losses and debts of the business
advantages of sole trader - correct answer - the owner keeps all
profit - they are independent -- owner has complete control -
may qualify for government help - simple to set up - flexibility
disadvantages of sole trader - correct answer - unlimitied liability -
long hours and hard work - too much responsibility - no
continuity - may struggle to raise finance (risky)
,IGCSE EDEXCEL BUSINESS EXAM
partnership - correct answer A business owned by 2-20 people
Deed of partnership - correct answer A binding legal document
which states the formal rights of partners
advantages of partnership - correct answer - easy to set up and run
- partners can specialise in their area of expertise - shared
burden - more capital can be raised -- more owners - financial
info is private
disadvantages of partnership - correct answer - Unlimited liability -
profit is shared - partners may disagree and fallout - any
partners decision is legally binding
limited partnership - correct answer A partnership where some
partners contribute capital and enjoy a share of the profit but
do not take part in the running of the business.
limited liability - correct answer business owner is only liable for the
original amount of money invested in the business
franchise - correct answer structure in which a business (franchisor)
allows another operator (franchisee) to trade under their name
,IGCSE EDEXCEL BUSINESS EXAM
advantages to franchisee - correct answer 1. Less risk - a tried and
tested idea 2. Back-up support is given 3. Set up costs are
predictable 4. National marketing may be organised
disadvantages to franchisee - correct answer * Profit is shared with
franchisor * Strict contracts have to be signed * Lack of
independence - strict operating rules apply * Can be an
expensive way to start a business
advantages to franchisor - correct answer fast method of growth,
cheaper method of growth, franchisees take some of the risk,
franchisees more motivated than employees
disadvantages to franchisor - correct answer - Potential profit is
shared with the franchisee - Poor franchisees may damage
brand's reputation - Franchisees may get merchandise from
elsewhere - Cost of support for franchisees may be high
Social enterprise - correct answer business that aims to improve
human or environmental well-being, charities for example
, IGCSE EDEXCEL BUSINESS EXAM
Features of social enterprise - correct answer have a clear social
and/or environmental mission, generate most income through
trade or donations, reinvest most profits, majority controlled in
the interests of social mission, accountable and transparent
Types of social enterprises - correct answer Cooperatives, Worker
cooperatives, Charities
Are limited companies incorporated or unincorporated - correct
answer incorporated
Features of limited companies - correct answer - limited liability -
raise capital by selling shares - elect directors to run company -
pay corporation tax
Forming a limited company - correct answer Must have minimum
*two members*, but *no upper limit.*
Important documents sent to Registrar of Companies before
formation - correct answer Especially *Memorandum of
Association* + *Articles of Association.*
IGCSE EDEXCEL BUSINESS EXAM GRADED A+
sole trader - correct answer business owned and operated by one
person
unlimited liability - correct answer The owner is personally and fully
responsible for all losses and debts of the business
advantages of sole trader - correct answer - the owner keeps all
profit - they are independent -- owner has complete control -
may qualify for government help - simple to set up - flexibility
disadvantages of sole trader - correct answer - unlimitied liability -
long hours and hard work - too much responsibility - no
continuity - may struggle to raise finance (risky)
,IGCSE EDEXCEL BUSINESS EXAM
partnership - correct answer A business owned by 2-20 people
Deed of partnership - correct answer A binding legal document
which states the formal rights of partners
advantages of partnership - correct answer - easy to set up and run
- partners can specialise in their area of expertise - shared
burden - more capital can be raised -- more owners - financial
info is private
disadvantages of partnership - correct answer - Unlimited liability -
profit is shared - partners may disagree and fallout - any
partners decision is legally binding
limited partnership - correct answer A partnership where some
partners contribute capital and enjoy a share of the profit but
do not take part in the running of the business.
limited liability - correct answer business owner is only liable for the
original amount of money invested in the business
franchise - correct answer structure in which a business (franchisor)
allows another operator (franchisee) to trade under their name
,IGCSE EDEXCEL BUSINESS EXAM
advantages to franchisee - correct answer 1. Less risk - a tried and
tested idea 2. Back-up support is given 3. Set up costs are
predictable 4. National marketing may be organised
disadvantages to franchisee - correct answer * Profit is shared with
franchisor * Strict contracts have to be signed * Lack of
independence - strict operating rules apply * Can be an
expensive way to start a business
advantages to franchisor - correct answer fast method of growth,
cheaper method of growth, franchisees take some of the risk,
franchisees more motivated than employees
disadvantages to franchisor - correct answer - Potential profit is
shared with the franchisee - Poor franchisees may damage
brand's reputation - Franchisees may get merchandise from
elsewhere - Cost of support for franchisees may be high
Social enterprise - correct answer business that aims to improve
human or environmental well-being, charities for example
, IGCSE EDEXCEL BUSINESS EXAM
Features of social enterprise - correct answer have a clear social
and/or environmental mission, generate most income through
trade or donations, reinvest most profits, majority controlled in
the interests of social mission, accountable and transparent
Types of social enterprises - correct answer Cooperatives, Worker
cooperatives, Charities
Are limited companies incorporated or unincorporated - correct
answer incorporated
Features of limited companies - correct answer - limited liability -
raise capital by selling shares - elect directors to run company -
pay corporation tax
Forming a limited company - correct answer Must have minimum
*two members*, but *no upper limit.*
Important documents sent to Registrar of Companies before
formation - correct answer Especially *Memorandum of
Association* + *Articles of Association.*
