INSTRUCTIONS Answer question ONE and any other TWO questions. QUESTION ONE a) Highlight six features of a small business. [6 marks] b) Describe six uses of a business to a country. [12 marks] c) Explain the following terms used in business: i) Limited liability [2 marks] ii) Company limited by guarantee [2 marks] iii) Company limited by shares [2 marks] iv) Certificate of incorporation [2 marks] v) Memorandum of association [2 marks] vi) Partnership deed [2 marks] QUESTION TWO Describe five distinguishing features of each of the following forms of business: a) Sole trader [10 marks] b) Partnership [10 marks] QUESTION THREE a) Describe three reasons why business location is an important consideration to an investor. [6 marks] b) Explain seven factors to consider when selecting a suitable location for a retail outlet. [14 marks] QUESTION FOUR Write short notes on each of the following giving examples: Page 1 of 2 a) Mergers [5 marks] b) Acquisitions [5 marks] c) Capital markets [5 marks] d) Franchise [5 marks] QUESTION FIVE a) Explain five characteristic that distinguish a co-operative from a public limited company. [10 marks] b) Detail the contents of a business plan. [10 marks]

QUESTION ONE<br />a) Highlight six features of a small business.<br />1. Limited resources: Small businesses typically have limited financial, human, and physical resources compared to larger corporations.<br />2. Owner-managed: Small businesses are often owned and managed by a single individual or a small group of individuals.<br />3. Limited market presence: Small businesses usually have a smaller market share and may struggle to compete with larger companies.<br />4. Simple organizational structure: Small businesses often have a straightforward organizational structure with minimal layers of management.<br />5. Limited product range: Small businesses may offer a more limited range of products or services compared to larger companies.<br />6. Local focus: Small businesses often cater to a specific local market or region.<br /><br />b) Describe six uses of a business to a country.<br />1. Job creation: Businesses provide employment opportunities for individuals, contributing to the reduction of unemployment rates.<br />2. Economic growth: Businesses contribute to the growth of the economy through increased production, consumption, and investment.<br />3. Tax revenue: Businesses generate tax revenue for the government, which can be used to fund public services and infrastructure development.<br />4. Innovation and technological advancement: Businesses often invest in research and development, leading to technological advancements and innovation.<br />5. Export and import: Businesses facilitate international trade, contributing to the balance of trade and economic growth.<br />6. Community development: Businesses can contribute to the development of local communities through corporate social responsibility initiatives and philanthropy.<br /><br />c) Explain the following terms used in business:<br />i) Limited liability: Limited liability refers to the legal protection that limits the financial liability of shareholders or owners to the amount they have invested in the business. This means that their personal assets are protected from business debts and liabilities.<br />ii) Company limited by guarantee: A company limited by guarantee is a type of company where the members' liability is limited to the amount they have guaranteed to pay in the event of the company's insolvency. Members are not shareholders but are individuals who have agreed to take responsibility for the company's debts.<br />iii) Company limited by shares: A company limited by shares is a type of company where the liability of shareholders is limited to the amount they have invested in the company. Shareholders have ownership in the company and have the right to receive dividends.<br />iv) Certificate of incorporation: A certificate of incorporation is a legal document issued by a government agency that confirms the establishment of a company. It sets out the company's name, purpose, and other essential details.<br />v) Memorandum of association: A memorandum of association is a legal document that sets out the objectives, powers, and scope of a company. It defines the company's purpose and the rules and its operations.<br />vi) Partnership deed: A partnership deed is a legal document that outlines the terms and conditions of a partnership agreement between two or more individuals. It specifies the rights and responsibilities of each partner, the distribution of profits and losses, and the procedures for admitting new partners or dissolving the partnership.<br /><br />QUESTION TWO<br />a) Sole trader<br />1. Single ownership: A sole trader is a business owned and operated by a single individual.<br />2. Unlimited liability: The owner has unlimited liability, meaning they are personally responsible for all debts and liabilities of the business.<br />3. Easy to set up: Sole traderships are relatively easy to establish, with minimal legal formalities.<br />4. Flexibility: Sole traders have complete control over the business decisions and can make changes quickly.<br />5. Limited resources: Sole traders often have limited financial and human resources compared to larger businesses.<br />6. Limited growth potential: The growth of a sole trader business is often limited by the owner's capabilities and resources.<br /><br />b) Partnership<br />1. Shared ownership: A partnership involves two or more individuals who share ownership of the business.<br />2. Shared profits and losses: Partners share in the profits and losses of the business according to the terms of the partnership agreement.<br />3. Unlimited liability: Partners have unlimited liability, meaning they are personally responsible for all debts and liabilities of the business.<br />4. Shared decision-making: Partners typically share in the decision-making process and management of the business.<br />5. Flexibility: Partnerships can be relatively easy to establish and can be dissolved or altered with relative ease.<br />6. Limited resources: Partnerships often have limited financial and human resources compared to larger businesses.<br /><br />QUESTION THREE<br />a) Describe three reasons why business location is an important consideration to an investor.<br />1. Accessibility: A business location that is easily accessible to customers and suppliers can reduce transportation costs and improve customer satisfaction.<br />2. Market proximity: Being located close to the target market can help a business better understand customer needs and preferences, and can also reduce marketing and distribution costs.<br />3. Infrastructure availability: A location with access to reliable infrastructure, such as transportation, utilities, and communication networks, can support efficient business operations and growth.<br /><br />b) Explain seven factors to consider when selecting a suitable location for a retail outlet.<br />1. Demographic factors: Consider the size, age, income, and lifestyle of the local population to ensure the retail outlet meets the needs and preferences of potential customers