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Read the scenario below and answer the question that follows - NSC Business Studies - Question 4 - 2024 - Paper 2
Question 4
Read the scenario below and answer the question that follows. SANDY BAKERY (SB) Sandy, the owner of Sandy Bakery, wants to use her additional income to expand her b... show full transcript
Worked Solution & Example Answer:Read the scenario below and answer the question that follows - NSC Business Studies - Question 4 - 2024 - Paper 2
Step 1
Identify the forms of ownership represented by Sandy Bakery and Bio Ltd.
Answer
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Sandy Bakery - Sole Proprietorship: Sandy Bakery is owned and managed by a single individual, Sandy, which exemplifies a sole proprietorship where the owner has complete control over the business.
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Bio Ltd. - Public Company: Bio Ltd. represents a public company as it allows individuals like Sandy to purchase shares and expand her investment, indicating that it is a recognized corporate entity that raises capital through shareholders.
Step 2
Motivate your answer by quoting from the scenario above.
Answer
Sandy Bakery is characterized as a sole proprietorship since it is directly owned by Sandy, who operates the business independently. This is supported by the phrase, "Sandy, the owner of Sandy Bakery."
On the other hand, Bio Ltd. is identified as a public company because Sandy decided to buy shares in it, demonstrating its ability to attract investments from the public. The action of buying shares signifies that Bio Ltd. offers opportunities for ownership to multiple investors, which is a hallmark of public companies.