Understanding Business Structures – Lesson Outline
SUGGESTED TIMEFRAME:
23 HOURS
GOAL:
ASSIST STUDENTS TO BECOME FAMILIAR WITH THE CONCEPTS OF
SOLE TRADER, PARTNERSHIPS, LIMITED COMPANIES, COOPERATIVES AND FRANCHISES.
ACTIVITY 1
QUIZ
Have students study the topic handout individually before forming into groups of four for the quiz (answers
below). Each team only has a few moments to discuss the question and give an answer. Give a point for each
correct answer. For a more intense learning game, divide the topic into four subjects (such as sole traders,
partnerships, limited companies and co-operatives). After the students have studied the topic handout and
formed groups, ask them to assign a number, from 1 to 4, to each team player. Each player is now the ‘expert’ on
the subject you assigned their number to, and only they can answer questions on that subject. This quiz is based
on a resource from Co-operative Learning by Spencer Kagan.
Use: UNDERSTANDING BUSINESS STRUCTURES handout + UNDERSTANDING BUSINESS STRUCTURES
worksheet
ACTIVITY 2
SOURCES OF FINANCE
Students can approach this match up activity individually or in pairs. They can either cut out the words and
definitions from the student worksheet to match them to the descriptions, or simply write them in. Once
completed, you can go through the definitions with the class.
Use: UNDERSTANDING BUSINESS STRUCTURES worksheet
ACTIVITY 3
CASE STUDY
Read through the case study with the class and then leave the students time to individually answer the related
questions. The activity can either be marked later or discussed in class, with students volunteering their answers.
ACTIVITY 4
CROSSWORD
After the students have completed the crossword (answers below), clarify the learning with some questions, such
as: Which business structure do you think is the most fun? Which makes the most money? Which is the most
challenging or the easiest? Ask them to explain their conclusions for discussion.
RESOURCES ON BUSINESS.GOVT.NZ:

business.govt.nz/starting-and-stopping/business-structures (for business structure definitions from
Business.govt.nz)
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ACTIVITY 1
QUIZ QUESTIONS AND ANSWERS
What is the name of the business structure when a
business is owned and run by one person?
Sole trader
In a franchise business structure, what does the
The business idea and the name of the
franchisee use?
business
What is the name of the business structure where people
invest money into the business in return for shares in the
Limited company
business?
In a co-operative business structure, who makes the
decisions, controls the business and shares the profits?
What is it called when a business is set up and run by
two or more people?
Who gets to ‘have a say’ in the running of a business that
is a worker co-operative?
Everyone
Partnership
Everyone
In a franchise business structure, what does the
A fee for the franchise and a percentage of
franchisor get?
the franchisee’s profits
You often need to invest money into a business. Another
name for this is a word beginning with ‘C’. What is the
Capital
word?
If you are a sole trader, who gets to keep the profits?
The sole trader
A sole trader is an unlimited liability. What does this
The owner is responsible for the debts of
mean?
the business
Give three ‘typical’ examples of the types of businesses
that would go into partnership?
Solicitors
Accountants
Estate agents
In a partnership, each partner has an unlimited liability.
Each partner is personally liable for the
What does this mean?
debts of the business
If the partners of a business had a high amount of start-
A limited company (The teacher can explain
up capital or wished to expand, what sort of business
why this would be, based on the notes
structure should they consider forming?
provided.)
Who keeps control of a Private Limited Company?
Shareholders
The public
Who can buy shares in a Public Limited Company?
Other businesses
Financial institutions
PAGE 2
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ACTIVITY 2
ANSWERS
Borrowing a sum of money that then has to be repaid with interest over a period
LOAN
of time, usually in fixed instalments, e.g., repay $100 a month for three years.
Borrowing money from a bank by drawing more money than is actually in a
current account. Interest may be charged on the overdraft, some banks offer
OVERDRAFT
interest-free overdrafts. The bank has the power to recall the overdrawn amount
at any time.
MORTGAGE
A loan where property is used as security.
Legally renting equipment prior to buying it. Pay a fixed amount over a certain
HIRE PURCHASE
period of time, e.g., two years at $500 per month. The asset is not owned until
the final payment is made.
Renting equipment or premises. The asset is never owned but the leasing
LEASING
company are usually responsible for maintenance and repairs.
Plc’s can sell shares in the company to raise additional finance. The investor’s
SHARE ISSUE
reward is dividends.
A long-term loan to a business, normally between five to 25 years. Interest is paid
DEBENTURE
on loan.
Funds given to businesses that do not have to be repaid. Normally provided by
GRANTS
government agencies.
This is when a company sells off its equipment or property to raise money, and
SALE OF ASSETS
then usually hires them from another company.
Part of the profit made remains in the business for the future accounting period,
RETAINED PROFIT
e.g., the next year.
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CROSSWORD ACTIVITY ON PARTNERSHIPS – ANSWERS
ACTIVITY 4
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