Himari is close to starting a new business in Japan.

After resigning from her job

with a management consultancy firm, she wants to open a shop selling greetings
cards. The local market for greetings cards is growing strongly and there is a clear
opportunity for her to start a successful business. She has approached an
important investor to raise finance and they have asked for a detailed business
plan. Himari is interested in government support that might be available to new
small businesses.
a Identify four ways that the government could support Himari’s new business. [4]
b Outline two elements that might be in Himari’s business plan. [4]
C Explain two reasons why Himari’s business plan might be useful to the investor. [6]
Five years ago, Sam Magoge started off as a sole trader offering his services as a plumber.
His business has grown substantially and he has built himself a very good reputation, known
for good quality service and completing jobs on time. He wants to expand and also start
taking up painting and decorating jobs. To keep up with the demand, he needs someone to
work with him permanently. He is evaluating two options, either to become a partnership or to
continue on his own and hire more employees instead.
A Define the term ‘partnership’. [2]
B State the difference between limited and unlimited liability. [2]
C Identify two differences between a sole trader and a partnership. [4]
D Give two reasons why a sole trader might find it hard to compete with larger firms in the same
industry. [4]
E Do you think that Sam should engage a partner or carry on working as a sole trader and hire more
employees instead? Justify your answer. [6]
TM Textiles Pvt. Ltd has been manufacturing towels and bed linen for ten years now. It is currently
owned by a very close group of ten friends and family members and communication is very fast. The
company has been very successful and has established itself as a trusted local brand. It wants to
expand its operations further and wants to sell its products to the international market. It needs to buy
new machinery and expand its current site. The directors of the company want to go public but some
of the ordinary shareholders are reluctant to turn from a private limited company to a public limited
company
a Define a limited company. [2].
b Outline two reasons why some of the shareholders are reluctant to become a public limited company.
[6].
c Explain two differences between private and public limited companies. [4].
d Do you think that TM Textiles Pvt. Ltd should go public or take a loan from a bank to finance its
Nanda has been working as a hotel manager for ten years now but feels that it
is time to move on and set up something on his own, such as a restaurant.
While he thinks that he has good experience and expertise in the hospitality
industry, he is not fully confident about starting up on his own and does not
want to start an unincorporated business. With the money that he has saved in
the last ten years, he has decided to buy a franchise in a popular national fast-
food chain.
a Define a franchise. [2].
b Explain why Nanda does not want to start an unincorporated business. [4]
C Explain four advantages to Nanda of owning a franchise [8]