Forms of Business Ownership

What is the main advantage of being a sole trader?

• Unlimited liability

• Limited liability

• Be able to make quick decisions

Who is limited liability an advantage to?

• Shareholders

• Sole Traders

• Stakeholders

Who is a company controlled by?

• Shareholders

• Stakeholders

• Managers

What legal identity does a company have in the eyes of the law?

• No legal identity

• Its own legal identity

• As shared legal identity with shareholders

Who has legal responsibility to settle debts in a company with unlimited liability?

• Owners

• Shareholders

• Stakeholders

Ordinary shares traded on the stock exchange are those issued by

• Private Limited Companies

• Public Limited Companies

• Sole Traders

The most important protection given by law to shareholders of a limited company is

• Right to receive dividends

• Limited liability

• Enhanced employment rights

An advantage of setting up as an incorporated rather than unincorporated business is that the business:

• Will have unlimited liability

• Will be able to obtain bank finance

• Remains in existence after a change in ownership

Which one of these statements about sole traders is FALSE? A sole trader...

• Has unlimited liability

• Can only have one employee

• Still has to pay tax on profits earned

As a result of the concept of limited liability, shareholders of an incorporated business

• Are only liable for their investment

• Have limited control over business decisions

• Are limited in the dividends they can be paid