Grade 9 Business Revision Worksheet
Section A: Multiple-Choice Questions (Circle the correct answer)
1. Which form of business ownership is legally separate from its owners and has limited
liability?
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a) Sole Proprietorship
b) Partnership
c) Corporation ✅
d) Franchise
2. What is the biggest disadvantage of corporations?
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a) Unlimited liability
b) Double taxation ✅
c) Difficult to raise funds
d) Limited life span
3. A horizontal merger occurs when:
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a) Two companies in completely different industries merge.
b) A company purchases its supplier or distributor.
c) Two companies in the same industry combine. ✅
d) A company merges with a foreign competitor.
4. In franchising, the company that sells the rights to operate under its brand is called:
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a) Franchisee
b) Franchisor ✅
c) Entrepreneur
d) Shareholder
5. Which of the following is an advantage of franchising for the franchisee?
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a) Full control over operations
b) Assistance with marketing and management ✅
c) No need to share profits
d) No contractual obligations
Section B: True or False (Write T for True, F for False)
A sole proprietorship is the easiest type of business to establish but has unlimited liability.T
In a partnership, all partners always have equal responsibility and liability. F
A conglomerate merger occurs when two companies from the same industry merge. F
One major disadvantage of franchises is the high initial investment and franchise fees. T
A corporation continues to exist even if the owner dies. T
Section C: Matching (Match the terms with the correct definitions)
Term
Definition
Corporation
A legal entity separate from its owners with limited liability. ✅
Sole Proprietorship
A business owned and operated by one person. ✅
Horizontal Merger
A merger between two companies in the same industry. ✅
Franchisor
The company that grants a franchise license to others. ✅
Coattail Effect
When the failure of one franchise location negatively impacts
others. ✅
Section D: Short Answer Questions
6. List two advantages and two disadvantages of corporations.
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Advantages: Limited liability, Ability to raise capital easily ✅
Disadvantages: Double taxation, More regulations and paperwork ✅
7. Explain the difference between a vertical merger, horizontal merger, and conglomerate
merger with an example for each.
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- Vertical Merger: Merger between companies at different stages of production (e.g., Car
manufacturer buying a tire company). ✅
- Horizontal Merger: Merger between two companies in the same industry (e.g., Nike
merging with Adidas). ✅
- Conglomerate Merger: Merger between unrelated industries (e.g., Amazon buying
Whole Foods). ✅
8. Why do some businesses prefer to become franchises instead of operating
independently?
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- Franchises provide a proven business model, brand recognition, and support from the
franchisor. ✅
9. What is the biggest challenge for a franchisee when running a franchise?
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- High initial costs, ongoing fees, and limited operational control. ✅
10. If you had to start a business, would you choose a sole proprietorship, partnership, or
corporation? Justify your choice.
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- Open-ended question: Acceptable answers vary based on reasoning. ✅
Bonus Question:
Give a real-world example of a franchise, and explain how it benefits from being a franchise.
Example: McDonald's benefits from global brand recognition, a proven business model, and
strong marketing support. ✅