Question 1: Define the term 'sole trader' and explain one advantage and one disadvantage of this ownership type.

Answer: A sole trader is a business owned and run by one person. Advantage: The owner keeps all profits. Disadvantage: The owner is personally liable for all debts.

Question 2: List two characteristics that distinguish a partnership from a sole trader.

Answer: A partnership involves two or more owners sharing responsibilities and profits; a sole trader has only one owner.

Question 3: Describe what is meant by a 'private limited company' (Ltd) and mention one benefit of this ownership structure.

Answer: A private limited company is a business owned by shareholders with limited liability, and shares are not available to the public. Benefit: Shareholders' personal assets are protected from business debts.

Question 4: Explain the main difference between a public limited company (PLC) and a private limited company (Ltd).

Answer: A PLC can sell shares to the public and is often larger, while an Ltd cannot sell shares publicly and is usually smaller.

Question 5: Identify two reasons why someone might choose to set up a business as a franchise.

Answer: Reasons include gaining support and branding from an established business, and reducing the risk of failure due to an existing customer base.

Question 6: Describe the main responsibilities of a business owner in a partnership.

Answer: Responsibilities include sharing management duties, making joint decisions, and sharing profits and liabilities.

Question 7: Draw a simple diagram to illustrate the ownership structure of a sole trader. Label the key parts.

Answer: A single circle labeled 'Owner' connected to the business, indicating sole ownership. The diagram should clearly show one owner responsible for all aspects.

Question 8: Sketch a basic flowchart showing the steps involved in setting up a private limited company from initial registration to starting trading.

Answer: A sequence starting with 'Choose Company Name', then 'Register with Companies House', 'Create Memorandum and Articles of Association', 'Register for taxes', and 'Begin trading'. The flowchart should have arrows indicating the process flow.

Question 9: Imagine you are starting a small bakery as a sole trader. List three decisions you would need to make before opening.

Answer: Decisions include choosing a location, deciding on the products to sell, and setting a budget for startup costs.

Question 10: Explain why a large corporation might prefer to be a public limited company (PLC) rather than a private limited company (Ltd).

Answer: A large corporation may prefer a PLC because it can raise significant capital by selling shares to the public, which is often necessary for expansion.