Gr. 11 - Sole traders and Partnerships

A sole trader is

• a business with one employee
• a business selling one product
• a business with one owner
• a business with one shop/office

A sole trader has responsibility for

• preparing the accounts of the business
• all aspects of their business
• selling the products
• completing spreadsheets

Unlimited liability means

• the business is closed down because of too much debt
• the owners' personal possessions can be used to cover the firm's debts
• the bank will refuse to give loans to the business
• the business will struggle to attract investors

An advantage of being a sole trader is

• you can take time off whenever you want
• you can grow your business really easily
• you can receive large amounts of finance from loans
• you receive all the firm's profit for yourself

A disadvantage of being a sole trader is

• a heavy workload creates stress and pressure
• a second opinion on important decisions is always available
• arguments and disagreements can harm the progress of the business
• the owner gets a smaller share of the profits

A partnership has between 2 and 20

• employees
• shareholders
• owners
• customers

It is easier to raise finance in a partnership because

• the partners have more personal wealth than a sole trader
• all the partners will invest a certain amount in the business
• the bank will give a partnership lower interest rates for all loans
• partnerships are the only type of business that can receive grants

Which of the following is an advantage of being in a partnership?

• Ideas and decision making can be shared
• The most senior partner has responsibility for running the business
• Partners can have responsibility for many different areas of the business
• Each partner gets the same share of the profits

What happens if a partner decides to leave the business?

• The other partners continue in the existing business
• The partnership is dissolved and reformed
• The partner who leaves is given compensation
• The partnership has to find a new lawyer

Why may an entrepreneur prefer to set up a business as a partnership?

• The entrepreneur would get to make all the decisions

• They entrepreneur would get to keep all the profit

• The business would benefit from a greater range of skills and knowledge

• The business would make more money quicker