Business management · 2002 · Paper 1 · SL · Markscheme

MARKSCHEME November 2002 BUSINESS & MANAGEMENT Standard Level Paper 1 11 pages N02/370/S(1)M+ INTERNATIONAL BACCALAUREATE BACCALAURÉAT INTERNATIONAL BACHILLERATO INTERNACIONALc [3 marks]1. (a) Outline three advantages of becoming a private limited company. Advantages: y all actions taken by the company are actions of the company rather than actions of the individual owners i.e. it has a separate legal entity y limited liability y risk transferred from owners to creditors y liable to pay corporation tax on profits y shares are transferable in accordance with articles y perpetual succession company not affected by death or retirement of member y economies of scale y easier to raise capital than sole trader or partnership. Award [1 mark] for each advantage outlined up to a maximum of [3 marks]. [5 marks] (b) Examine the deci sion taken by Joseph Obeng to form a joint venture with Manjit Daswami, rather than to create a separate company. Joseph Obeng decided to form a joint venture in order to retain tight control of his business rather than lose operating and financial control. He likes to make the decisions. Creating a separate company would limit his control. He may find it easier to raise finance through a joint venture. [4 to 5 marks] The answer explains what is meant by a joint venture. The decision to form a joint venture rather than a separate company is examined in detail and is relevant to the case study. [2 to 3 marks] The answer attempts to explain what is meant by a joint venture. The decision is examined, but the answer may lack detail. Some reference should be made to the case study. [1 mark] A general and simplistic response. – 3 – N02/370/S(1)M+