IB Business & Management Revision Workbook ANSWERS 1.

2 Types of Organisation

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Unit 1.2 Unit 1.2
Types of Organi sat ion Types of Organi sat ion


Task 1 Complete the missing words

sole trader
control
profits
unlimited liability
partnership
Deed of Partnership
silent partners
shareholders
incorporated
vote
Private
public
initial public offering
dividend
twice
capital gain

Task 2 Vocab Quiz


Key Term
Charities
Flotation
Non-governmental
organisations
Privatisation
Public sector
Silent (sleeping) partner
Stock Exchange
Unlimited liability













IB Business & Management Revision Workbook ANSWERS 1.2 Types of Organisation

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Task 3 - True or False?

True / False
a. T
b. T
c. F
d. F
e. T
f. F
g. T
h. T
i. T
j. F
k. T


Task 4 - Explain one

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)









IB Business & Management Revision Workbook ANSWERS 1.2 Types of Organisation

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Task 5 - Multiple Choice

1. B. Has exclusive responsibility for the running of the business

2. B. Continuity

3. D. The various sources of finance available

4. D. Autonomy in decision making

5. A. Signing the contents of a partnership deed

6. A. Memorandum of Association

7. A. Business plan

8. D. They are registered as having limited liability

9. D. The Board of Directors of a private limited company own the business

10. B. An advantage for shareholders is having limited liability

11. A. States the main purpose of a corporation

12. A. Public companies operate in the public sector

13. C. Are legally entitled to a share of company profits

14. D. Public transport firms

15. D. Non-executive directors of a company

16. B. Has unlimited liability for its debts

17. A. There are higher risks than working for someone else

18. A. The liability of a business and the amount of capital invested

19. C. There can be more than one employer

20. D. Consultancy services

21. B. Dealing with different sources of finance

22. A. An organisation owned by the state or government

23. C. Certificate of Incorporation

24. B. Non-governmental organisation

25. B. Privatisation

26. A. Joint stock company

27. A. Is owned by the government

28. B. Have to publish certain financial information to all stakeholders

29. C. Spending on state education and health care

30. D. Corporation tax refunds