Business Management UNIT 3/4 EXAM
Latest 2026 (100% Correct Answers)
Sole Trader - CORRECT ANSWERS Businesses owned and operated by a single individual.
Advantage:
-Owner has complete control over all decisions in the business
- The owner has the right to keep all the profits after taxes
Disadvantage:
- Unlimited liability for business debts
- Burden of management and failure all falls to the owner
Partnership - CORRECT ANSWERS Businesses that are owned by a minimum of 2 and a
maximum of 20 people. A partnership may be made orally or written.
Advantage:
- Combined funds and financials
- Partners can share the workload
Disadvantage:
- Each partner has unlimited liability
- A possibility of disputes
,Private limited company - CORRECT ANSWERS An incorporated business with a minimum of 5
and a maximum of 50 private shareholders, and whose shares are only offered to those whom the
business wishes to have as part owners.
Advantage:
- Limited liability
- Existence of the business is not threatened by death or removal of one of the directors or shareholders
Disadvantage:
- Higher degree of government control and reporting requirements
- Higher degree of complexity in establishing
Public Listed Company - CORRECT ANSWERS An incorporated business with a minimum of 5
shareholders, and whose shares are publicly listed on the ASX (Australian Securities Exchange). E.g.
Telstra, Westpac, Woolworths and Virgin Australia
Advantage:
- Easier to attract public finance because the business has been incorporated
- Limited liability
Disadvantage:
- Double taxation higher operating fees
- Shareholders may have diverse priorities, which can be difficult to satisfy
Social Enterprise - CORRECT ANSWERS A business that operates with the main objective of
fulfilling a social need, rather than making a profit. E.g. The Big Issue, Thank You Water
, Advantages:
- Can open up new markets
- Positive impact on the community/society increases reputation of the business
Disadvantage:
- Significant operating costs
- Can be difficult to focus on both social and financial objectives
Government Business Enterprise (GBE) - CORRECT ANSWERS A business that is government
owned and operated. GBEs seek to run profitably by controlling costs and selling their goods and
services at a price to cover costs. E.g. VicRoads or Aus Post
Advantages:
+ A GBE is able to carry out government policies, delivering community services in areas where private
sector businesses might hesitate to invest.
+ The provision of healthy competition to businesses operating in the private sector
Disadvantages:
-Inefficiencies caused by government 'red tape'—excessive regulation or rigid conformity to rules.
-There can be less accountability within a GBE, resulting in less productivity and negative attitudes
amongst staff.
Objective - CORRECT ANSWERS A desired goal, outcome or specific result the business wishes
to achieve
Business Objectives - CORRECT ANSWERS - To make a profit
- To increase market share
Latest 2026 (100% Correct Answers)
Sole Trader - CORRECT ANSWERS Businesses owned and operated by a single individual.
Advantage:
-Owner has complete control over all decisions in the business
- The owner has the right to keep all the profits after taxes
Disadvantage:
- Unlimited liability for business debts
- Burden of management and failure all falls to the owner
Partnership - CORRECT ANSWERS Businesses that are owned by a minimum of 2 and a
maximum of 20 people. A partnership may be made orally or written.
Advantage:
- Combined funds and financials
- Partners can share the workload
Disadvantage:
- Each partner has unlimited liability
- A possibility of disputes
,Private limited company - CORRECT ANSWERS An incorporated business with a minimum of 5
and a maximum of 50 private shareholders, and whose shares are only offered to those whom the
business wishes to have as part owners.
Advantage:
- Limited liability
- Existence of the business is not threatened by death or removal of one of the directors or shareholders
Disadvantage:
- Higher degree of government control and reporting requirements
- Higher degree of complexity in establishing
Public Listed Company - CORRECT ANSWERS An incorporated business with a minimum of 5
shareholders, and whose shares are publicly listed on the ASX (Australian Securities Exchange). E.g.
Telstra, Westpac, Woolworths and Virgin Australia
Advantage:
- Easier to attract public finance because the business has been incorporated
- Limited liability
Disadvantage:
- Double taxation higher operating fees
- Shareholders may have diverse priorities, which can be difficult to satisfy
Social Enterprise - CORRECT ANSWERS A business that operates with the main objective of
fulfilling a social need, rather than making a profit. E.g. The Big Issue, Thank You Water
, Advantages:
- Can open up new markets
- Positive impact on the community/society increases reputation of the business
Disadvantage:
- Significant operating costs
- Can be difficult to focus on both social and financial objectives
Government Business Enterprise (GBE) - CORRECT ANSWERS A business that is government
owned and operated. GBEs seek to run profitably by controlling costs and selling their goods and
services at a price to cover costs. E.g. VicRoads or Aus Post
Advantages:
+ A GBE is able to carry out government policies, delivering community services in areas where private
sector businesses might hesitate to invest.
+ The provision of healthy competition to businesses operating in the private sector
Disadvantages:
-Inefficiencies caused by government 'red tape'—excessive regulation or rigid conformity to rules.
-There can be less accountability within a GBE, resulting in less productivity and negative attitudes
amongst staff.
Objective - CORRECT ANSWERS A desired goal, outcome or specific result the business wishes
to achieve
Business Objectives - CORRECT ANSWERS - To make a profit
- To increase market share
