JSS 1 Business Studies Flashcards: Forms, Advantages and Disadvantages of Business Organisations

Question 1

Ifeoma alone owns and controls a neighbourhood kiosk. How is a sole proprietorship defined?

Accepted Answer

a business owned by one person

Question 2

Two photographers combine skills and capital under an agreement. How is their partnership defined?

Accepted Answer

a business owned by two or more persons by agreement

Question 3

A registered enterprise exists separately from shareholders whose risk is limited. How is this company defined?

Accepted Answer

a registered company whose owners have limited liability

Question 4

Farmers jointly own an organisation created for shared benefit. How is this cooperative defined?

Accepted Answer

a member-owned organisation formed for mutual benefit

Question 5

A sole trader changes prices immediately without consulting co-owners. State the advantage illustrated.

Accepted Answer

quick decision-making

Question 6

One kiosk owner cannot raise enough money to expand. This shows what common weakness of sole ownership?

Accepted Answer

limited access to capital

Question 7

A sole trader's business cannot pay its debts, so personal property may be claimed. What does unlimited liability mean here?

Accepted Answer

the owner may lose personal assets for business debts

Question 8

Why might three partners raise more start-up capital than one sole trader?

Accepted Answer

several partners can contribute

Question 9

Before trading, partners record profit sharing, duties and dispute procedures in a ____.

Accepted Answer

partnership agreement

Question 10

Two partners insist on opposite expansion plans. Identify the likely management problem.

Accepted Answer

decision-making conflict

Question 11

A shareholder loses only the amount invested when the company fails. What does limited liability protect?

Accepted Answer

owners’ personal assets beyond their investment

Question 12

One shareholder leaves, yet the company continues trading. Explain the feature that permits this.

Accepted Answer

it has separate legal existence

Question 13

Registration, reports and formal meetings create what disadvantage for a limited company?

Accepted Answer

more legal formalities and reporting

Question 14

Members of a cooperative must choose a chairperson. How is the decision commonly made?

Accepted Answer

members vote democratically

Question 15

Market women pool funds to buy goods more cheaply. State the cooperative benefit shown.

Accepted Answer

members combine resources for shared benefit

Question 16

What may limit the speed of a cooperative's decision about buying a vehicle?

Accepted Answer

the need for member consultation

Question 17

One person wants full control of a small barbing shop. The most suitable form is ____.

Accepted Answer

sole proprietorship

Question 18

Doctors want to pool professional skills and share duties under an agreement. Select the suitable form: sole proprietorship, partnership, limited company, or cooperative.

Accepted Answer

partnership

Question 19

Investors want the venture to be legally separate and their personal risk limited. Name the suitable form.

Accepted Answer

limited liability company

Question 20

What factors should founders compare before choosing a form of business organisation?

Accepted Answer

ownership, capital, risk and control needs

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