A firm owned and managed by a family is an example of ______?

1. Analyze the question The question asks what type of business organisation a firm is when it is owned and managed by a family.

2. Explain the concepts

• Joint stock exchange: not a type of business. A stock exchange is a market where shares are bought and sold. (The term probably should be "joint stock company.")
• Cooperative society: a voluntary association of people with a common interest, such as farmers or traders, who pool resources and share benefits, usually with one member, one vote.
• Sole proprietorship: a business owned and run by one person.
• Partnership: a business owned and run by two or more persons (2 to 20 in Nigeria for ordinary partnerships) who share capital, management, profits and losses.

3. Work through the solution A family business involves more than one person, for example a father, mother and children, who own and manage the firm together. That rules out a sole proprietorship, which has a single owner. It is not a stock exchange, and it is not a cooperative society, which is formed by members with a shared economic goal, not by family ties.

The best fit is a partnership, where several people jointly own and manage the business.

4. Answer The family firm is most likely a partnership, which is option D.

5. Exam tip Count the owners:

• One owner → sole proprietorship
• 2 to 20 owners managing together → partnership
• Many shareholders, separate legal identity → limited liability company
• Members with a shared interest → cooperative society

Note that a family business can sometimes be a sole proprietorship, for instance if one person owns it and relatives only help. In JAMB, however, "owned and managed by a family" points to joint ownership, which is a partnership.