Types of Business Organisation

Types of Business Organisation

Multiple Choice

One of the claimed advantages of a sole trader business is that:

• owners have limited liability

• shares can be sold to raise capital

• decisions and responsibilities can be shared

• the owner has complete control

Multiple Choice

Select the true statement about sole traders.

• They are run by and employ one person.

• Most small businesses are sole traders.

• All sole traders are public companies.

• Most charities are sole traders.

Multiple Choice

One disadvantage of a sole trader business is that

• capital is limited to the owner's savings and bank loans
• decisions take too long to make
• owners may disagree 

Multiple Choice

One disadvantage of a sole trader business is that

• capital is limited to the owner's savings and bank loans
• decisions take too long to make
• owners may disagree 

Multiple Choice

One of the advantages of a sole trader business is that

• owners have limited liability
• shares can be sold to raise capital
• decisions and responsibilities can be shared
• the owner has complete control over decision making

Multiple Choice

The best definition of a sole trader is a business that

• only employs one person

• is owned by one person

• has a single customer

• is a single firm in the industry

Fill in the Blanks

Multiple Choice

Name the partnership in which liability of one partner is limited and the liability of remaining partners unlimited.

• Partnership at will

• General Partnership

• Limited Liability Partnership

• Particular Partnership

Multiple Choice

Meaning of Unlimited liability is

• unlimited resources may be use

• Unlimited payment is to be done

• Personal property of proprietor will be use to pay business debt

• unlimited time for business

Fill in the Blanks

Multiple Choice

A ________ must name a board of directors that will make the major policy and financial decisions for the business.

• limited liability company
• proprietorship
• corporation
• limited liability partnership

Multiple Choice

A shareholder

• Owns a share in a Sole Trader

• Owns shares in a Private Limited Company

• Owns shares in a Partnership

Multiple Choice

Which is false about private limited companies?

• They are usually family-run businesses.

• They sell shares on the stock market.

• Their shares are owned privately.

• They may be small businesses.

Multiple Choice

Name the document which is not required by public company, if they are following Table F of Company Act

• Article of Association

• Memorandum of Association

• Name approval Letter

• Consent of Proposed directors

Multiple Choice

The main reason why an entrepreneur will convert an LTD into a PLC is

• they don't want to remain in the private sector
• they want to gain the benefits of limited liability
• they want to keep the annual accounts secret
• they want to raise additional capital to expand the business

Multiple Choice

Which of the following is not a feature of a private limited company?

• Shares can be issued to raise capital
• Shares can be bought  and sold on the Stock Exchange
• All owners of the business have limited liability
• The business continues after the death of a shareholder

Multiple Choice

The people who make the major policy and financial decisions in a corporation are the 

• investors
• board of directors
• managers
• owners

Multiple Choice

Which is true about PLCs?

• There must be at least one shareholder.

• The people who own the company are shareholders.

• Shares are available on the stockmarket.

• Shares are never traded on the stockmarket.

Multiple Choice

One of the main disadvantages of a PLC is the

• loss of control by the owners as additional shares are sold
• firms in the public sector are often less efficient
• possibility that if a company fails owners might lose assets