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2 Types of Organisation
U nit 1 .2
Ty pe s of O rga nisat io n
sole trader
control
profits
unlimited liability
partnership
Deed of Partnership
silent partners
shareholders
incorporated
vote
Private
public
initial public offering
dividend
twice
capital gain
Key Term
Charities
Flotation
Non-governmental
organisations
Privatisation
Public sector
Stock Exchange
Unlimited liability
1
IB Business & Management Revision Workbook – ANSWERS 1.2 Types of Organisation
True / False
a. T
b. T
c. F
d. F
e. T
f. F
g. T
h. T
i. T
j. F
k. T
a.
Specialisation; own control; flexibility; avoid diseconomies of scale; clear focus; not accountable to
shareholders
b.
Provides an opportunity for shareholders to have their say in the running of the company; allows
shareholders to vote for the Board of Directors to run the company on their behalf; legal obligation to
hold Directors accountable for the management and running of the company
c.
Businesses owned and controlled by private investors (individuals and businesses); Profit is the key
motive for most of these businesses
d.
Public corporations are owned by the government, i.e. they operate in the public sector (although
the term is confusingly used in some countries to refer to public sector companies); By contrast, a
public company is one that operates in the private sector and is owned by shareholders who have
limited liability
e.
Greater sources of finance than partnerships or sole proprietorships; easier management and
control than being a public company; cheaper to set up than a PLC; shareholders have limited
liability; privacy (no need to publish detailed annual reports to the public)
2
IB Business & Management Revision Workbook – ANSWERS 1.2 Types of Organisation
2. B. Continuity
6. A. Memorandum of Association
7. A. Business plan
17. A. There are higher risks than working for someone else
25. B. Privatisation