Ownership of Firms

2017#5 (88%) Alan and his partners turned their partnership into a private limited company. After the change, the firm will

• A. have more capital for development

• B. have a lower average production cost

• C. enjoy a lower profits tax rate

• D. have a separate legal entity.

2013#9 (84%)

If a partnership is turned into a private limited company,

• (1) the company will become an independent legal entity.

• (2) the company will be at a higher risk of being taken over

• (3) the company will pay a higher profits tax rate

• (4) the number of owners will increase

PP#7

Tommy and David have turned their firm from a partnership into a private limited company. Which of the following statements is correct?

• A. They have a higher incentive to work as the profits tax rate is lower

• B. The firm can still exist even if one of the owners goes bankrupt

• C. The size of the firm will increase

• D. The financial conditions of the firm have to be disclosed to public

2007#20 (77%)

Which of the following is a possible reason for turning a partnership into a private limited company?

• A. The owners will make more profit

• B. The owners will enjoy limited liability

• C. It will ensure the financial privacy of the firm

• D. Ownership of the firm can be transferred without the consent of other owners

2004#22 (80%) Compared with a limited company, a general partnership has a _______________________ legal set-up procedure.

1997#58

Mr Wai solely owns a restaurant in Tai Po and his wife runs the business for him. As compared to a public limited company, the type of ownership of the restaurant has the following advantages EXCEPT separation of ownership and _____________________.

1996#17

Which of the following are the advantages of turning a sole-proprietorship into a private limited company?

• (1) greater flexibly in decision-marking

• (2) wider sources of capital

• (3) higher incentive to work

• (4) limited liability

2001#22

Mr Lee is a private medical doctor. He wants to expand his business. He can raise funds by

• (1) borrowing from banks.

• (2) inviting partners to form a general partnership.

• (3) forming a private limited company and issuing shares.

2003#3

John is running a firm with Peter. Since Peter has not been running the firm properly, both of them have had to sell their personal property to cover the firm's debts. To what type of business ownership does the above firm belong?

2019#7 (81%)

New World China Land Limited (Stock Code:0917) announced privatization of the company and cancelled its listing status at the Hong Kong Stock Exchange. As a result, the company can choose not to disclose its ________ __________ ( two words) to the public