1. Business Ownership Types

What is the definition of UNLIMITED LIABILITY?

• A legal obligation on the owners of a business to settle all debts of the business. In law there is no distinction between the assets and debts of the business and the personal assets and debts of the owner.
• Owners are not fully liable for the company’s debts : UNLIMITED LIABILITY

What is a sole trader?

• A type of business that is owned by just one person.
• A business owned by two or more people. 
• An agreement or license between two parties which gives a person or group of people the rights to market a product or service using the trademark of another business.

Can a sole trader have other people working for them?

• Yes
• No

What kind of liability does a sole trader have?

• Limited Liability
• Unlimited Liability

What are the main advantages of being a sole trader?

• Own boss, Greater opportunity for flexible working, Keep all profits
• Unlimited liability, Time off/holidays
• No one to share decision making, No continuity of existence
• Limited finance
  

What are the main disadvantages of being a sole trader?

• Own boss
• Unlimited liability, Time off/holidays, No one to share decision making, No continuity of existence, Limited finance
• Total control
• Keep all profits

What is a partnership?

• A type of business that is owned by just one person.
• A business owned by two or more people. 
• An agreement or license between two parties which gives a person or group of people the rights to market a product or service using the trademark of another business.

How many people could own a partnership?

• 0 - 10 people
• 2 - 10 people
• 2 - 20 people

Can a partnership have other people working for them?

• Yes
• No

What is the name of the document that lays out rules for running and dissolution of the partnership (e.g. sharing of profits)?

• Deed of Partneship
• Certificate of Partneship
• Contract of Partnership