Section 2: Stakeholders, forms of business and governance

Name the stakeholder, say what they want, then say how the decision affects them. Match each legal form to who owns it and who carries the risk.

A lesson for this section

Quick checks: multiple choice

Question 1 · Both levels

Which of these is an internal stakeholder of Athenry Bakery Ltd?

Question 2 · Both levels

Kerry Mill supplies flour to a bakery. What does Kerry Mill want from the bakery as a stakeholder?

Question 3 · Both levels

Which statement describes interdependence between a business and its employees?

Question 4 · Both levels

Which of these situations is a conflict between two stakeholders?

Question 5 · Both levels

Ballina Plastics plans to extend its factory. Local residents fear more lorries on a narrow road. Which approach is most likely to avoid conflict with the residents?

Question 6 · Both levels

On a power-interest grid, how should a business treat a stakeholder with high power and high interest?

Question 7 · Higher Level

A state agency grants the licence Wicklow Water Sports needs to operate on a lake. It checks the licence once a year and takes no interest in the firm's day-to-day decisions. Where does the agency sit on a power-interest grid?

Question 8 · Both levels

A residents' group near a new hotel in Kilkee cares a great deal about the hotel's plans but has no say in its decisions. How should the hotel treat the group, using a power-interest grid?

Question 9 · Higher Level

Why should a business prioritise some stakeholders' interests when it plans a major change?

Question 10 · Higher Level

An investor puts €50,000 into a new food business. Five years later the business is well established and profitable. How is the investor's main interest likely to have changed?

Question 11 · Both levels

Which of these describes the government's interest in a business as a stakeholder?

Question 12 · Both levels

Which of these is a way that a local community depends on a business in its area?

Question 13 · Both levels

Declan runs a painting business in Mallow as a sole trader. The business cannot pay a debt of €20,000. What does unlimited liability mean for him?

Question 14 · Both levels

Which of these describes an ordinary partnership?

Question 15 · Both levels

Which feature is true of a private limited company (Ltd)?

Question 16 · Both levels

What is the main feature that distinguishes a public limited company (PLC) from a private limited company?

Question 17 · Both levels

Gráinne opens a coffee shop in Naas under the brand of a large coffee chain. She pays the chain a start-up fee and a share of her sales each month, and must follow its menu and shop design. What form of business is this?

Question 18 · Both levels

How are votes shared out at the annual general meeting of a co-operative?

Question 19 · Both levels

Second Chance Cycles in Tuam repairs donated bikes, sells them at low prices and trains young people who have left school early. Its surplus is used to fund more training places. What kind of enterprise is it?

Question 20 · Both levels

Which statement describes a commercial semi-state company?

Question 21 · Both levels

The government sells its shares in a State-owned airline to private investors. What is this called?

Question 22 · Both levels

A private bank is close to collapse. To protect savers, the government buys all of its shares and takes control of it. Which change in ownership has taken place?

Question 23 · Higher Level

The founders of Lagan Software Ltd own 90% of its shares. They plan to turn it into a PLC and sell new shares on a stock exchange to fund expansion. Which is a drawback of this change for the founders?

Question 24 · Both levels

What does an external auditor do for a company?

Question 25 · Both levels

A large insurance firm employs a compliance officer. What is the main purpose of this role?

Question 26 · Higher Level

Kilcullen Foods keeps a risk register. Each risk is scored for how likely it is and how serious its impact would be. How does this help the firm to regulate itself internally?

Question 27 · Both levels

What is meant by governance in an organisation?

Question 28 · Both levels

Question 29 · Higher Level

An investor reads three changes in a company's ESG report. Which one is reported under governance?

Question 30 · Higher Level

Which of these is an example of a business being regulated externally rather than internally?

Question 31 · Higher Level

In Bantry, a private hotel, a community-run not for profit childcare centre and a public sector health centre all operate. Which statement compares their contributions to the area accurately?

Theory and practical questions

Stakeholders at a boatyardWritten question, both levels · 5 marks

Shannon Boatworks Ltd builds wooden boats in a small village on the River Shannon and employs 18 people. Its owners plan to double the size of the workshop. They want to keep building costs down. Local residents are worried about noise and about lorries on the narrow village roads. The bank that will lend money for the extension wants its repayments made on time.

(a) Name one internal stakeholder in Shannon Boatworks Ltd. [1]

0 words · a sentence

(b) Describe one conflict between two stakeholders of Shannon Boatworks Ltd. [2]

0 words · one point a mark

From sole trader to companyWritten question, Higher Level · 9 marks

Róisín Kelly has run Kelly's Kitchen Design as a sole trader in Athlone for six years. Sales have grown, and she wants to borrow €250,000 to open a showroom. Her accountant advises her to form a private limited company, Kelly's Kitchen Design Ltd. In time she may sell some shares to an outside investor and appoint a board of directors.

(a) Explain two advantages for Róisín of forming a private limited company. [4]

0 words · one point a mark

(b) Explain what is meant by governance in a company such as Kelly's Kitchen Design Ltd. [2]

0 words · one point a mark

Sharing a co-operative's surplusBusiness data, both levels · 7 marks

Lough Derg Growers is a co-operative owned by five fruit growers, who buy their seeds, compost and packaging from it. This year it made a surplus of €18,000. The members agreed to pay the whole surplus back to members in proportion to how much each bought from the co-operative during the year. The table shows the shares held and purchases made by each member.

Shares held and purchases made by each member of Lough Derg Growers during the year.
Member	Shares held	Purchases from the co-operative (€)
Ahern	2,000	96,000
Burke	500	72,000
Costello	1,200	60,000
Doyle	300	84,000
Egan	1,000	48,000

(a) Calculate the surplus paid back as a percentage of total purchases. [2]

(b) Calculate the amount paid to Doyle. [2]

€

(d) Explain one way a co-operative differs from a public limited company. [2]

0 words · one point a mark