Business Ownership and Structure

Which of the following best describes the term limited liability? If the business fails:

• Personal possessions of the owner can be taken to pay any debts

• The owner is personally liable for all the debts of the business

• There is no limit on the amount the owner has to pay to settle debts

• The owner only loses the amount invested in the business

Which type of legal structure is used when two or more people join together to start a business and have unlimited liability?

• Sole trader

• Partnership

• LTD

• PLC

What are the owners of private and public limited companies called?

• Stakeholders

• Managers

• Board of directors

• Shareholders

Which of the following is an advantage of operating a large established business as a public limited company?

• Shares can be sold to the public to raise additional finance

• Financial accounts are published

• Shares can only be sold to invited investors to raise finance

• Owners have unlimited liability

Which of the following is NOT a type of business ownership?

• partnership

• sole proprietorship

• entrepreneurship

• franchise

A _____ is a legal agreement between two or more people, and is the least common form of business.

• franchise

• partnership

• sole prorietorship

• corporation

Only liable for up to the amount invested into the company, and has little to no voice in management.

• General Partner
• Proprietor
• Limited Partner
• Corporation

The major policy and financial decision makers of a corporation are determined by the...

• CEO/GM/President
• Chairman of the Board
• Shareholders
• Board of Directors

This type of organization is a legal entity separate from its owners.

• Sole proprietorship
• Partnership
• Corporation
• Franchise

If a company has unlimited liability they:

• have full responsibility for companies debts

• must make up difference on money owed

• could lose personal savings, property, car, etc.

• All of the above