Name ____________________ (AS business)
(Marks 35)
Multiple choice questions (tick the correct alternative)
1 mark each
1. Which of the following is a characteristic of a sole trader business?
a) Limited liability
b) Shared ownership
c) Easy to set up with minimal legal formalities
d) Must have at least two owners
2. In a partnership, profits are generally shared among the partners:
a) Based on the amount invested
b) Equally unless otherwise agreed
c) According to seniority
d) Only if there is a written contract
3. Which of the following is an advantage of being a sole trader?
a) Unlimited liability
b) Full control over decisions
c) Shared responsibility for debts
d) Separate legal identity
4. A key difference between private limited companies and public limited
companies is:
a) Public limited companies can sell shares to the public
b) Private limited companies are larger than public limited companies
c) Public limited companies are exempt from paying taxes
d) Private limited companies have limited liability, but public limited
companies don’t
5. What is the primary benefit of forming a limited liability company?
a) The owners’ personal assets are protected from business debts
b) It is easy to dissolve the company
c) The company is free from all taxation
d) Unlimited liability for shareholders
6. In which type of business structure do the owners have unlimited liability?
a) Sole trader
b) Private limited company
c) Public limited company
d) Franchise
7. Which of the following is a feature of a public limited company?
a) Unlimited liability
b) Shares can be traded on the stock exchange
c) Ownership cannot be transferred
Name ____________________ (AS business)
(Marks 35)
d) Franchise
8. A franchise is a business structure in which:
a) A franchisee buys the right to operate a business using the franchisor’s
name and system
b) The franchisee owns the business brand
c) The franchisor has no control over how the business operates
d) The franchisee pays no fees or royalties
9. What distinguishes a social enterprise from other business forms?
a) Its primary goal is to maximize profit
b) It is owned by the government
c) It reinvests profits into social or environmental causes
d) It has unlimited liability for its owners
10.Which of the following is NOT a characteristic of a partnership?
a) Partners share profits and losses
b) Partners have limited liability
c) Decisions are often made jointly
d) There is usually a partnership agreement
11.In a joint venture, two or more businesses:
a) Merge to create one company permanently
b) Work together on a specific project while remaining separate entities
c) Share all resources permanently
d) Are required to operate under one business name
12.Which business structure typically has the simplest process for setting up?
a) Sole trader
b) Partnership
c) Public limited company
d) Franchise
13.A private limited company (Ltd) differs from a public limited company (Plc) in
that:
a) Its shares are not available for sale to the general public
b) It has fewer legal responsibilities
c) It must have at least 500 shareholders
d) It operates without liability protection for its owners
14.Which of the following is typically an advantage of forming a partnership?
a) Limited liability for all partners
b) Easy access to capital through selling shares
c) Shared responsibility and diverse skills
d) No need for a partnership agreement
Name ____________________ (AS business)
(Marks 35)
15.What is a major disadvantage of a sole trader business?
a) The owner has limited control over decisions
b) The owner must share profits with employees
c) The owner has unlimited liability for business debts
d) The business must be publicly listed
16.The owners of a franchise business:
a) Retain full control over the business
b) Use the franchisor’s brand and systems in exchange for fees
c) Are responsible for creating their own marketing materials
d) Do not need to follow the franchisor’s rules and guidelines
17.In a public limited company (Plc), the minimum number of shareholders is:
a) 1
b) 2
c) 7
d) 50
18.Social enterprises differ from traditional businesses because:
a) They are not allowed to make a profit
b) They focus on creating social and environmental value rather than
maximizing wealth
c) They are exempt from all taxes
d) They can never operate internationally
19.A significant advantage of a joint venture is that:
a) One company bears all the risk
b) Both companies benefit from shared resources and expertise
c) Both companies must fully integrate their operations
d) One company takes complete control over the other
20.What type of business entity allows owners to have limited liability but
requires the business to adhere to stringent reporting and legal
requirements?
a) Sole trader
b) Partnership
c) Public limited company
d) Franchise
21.Give two examples of primary economic sector.
______________________________________________________________________________
____(1)
22.Give two examples of quaternary economic sector.
Name ____________________ (AS business)
(Marks 35)
______________________________________________________________________________
____(1)
23.Explain one difference between a private-sector and a public-sector
organisation.
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__________________(2)
24.Explain one way in which legal identity and continuity help companies to
operate effectively.
______________________________________________________________________________
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_____________________
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______________________________________________________________________________
___________(2)
25.Explain one benefit for a business of engaging in a joint venture.
______________________________________________________________________________
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_____________________
______________________________________________________________________________
______________________________________________________________________________
___________(2)
26.Define the term cooperative.
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
__________________(2)
Name ____________________ (AS business)
(Marks 35)
27.Analyse one advantage and one disadvantage of a business changing from
private Ltd. to public limited company.
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_____________________
______________________________________________________________________________
______________________________________________________________________________
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_____________________
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______________________________________________________________________________
___________(5)
