Business Forms FDIP

Which two types of business form mean that the owners of the business cannot lose their personal assets (often house and savings) should the business not be able to pay its debts?

• Sole trader

• Partnership

• Community Interest Company

• Public Limited Company

Which type of business means the owner works on their own, but sometimes has employees. The owner also does not enjoy limited liability.

• Partnership

• Private Limited Company

• Sole trader

• Public Limited Company

This business form can sell shares to the public on a stock exchange and raise large amounts of finance this way.

• Public sector organisation

• Partnership

• Private Limited Company

• Public Limited Company

This type of business form doesn't enjoy limited liability, but capital can be invested by multiple people.

• Sole trader

• Private Limited Company

• Partnership

• Public Limited Company

These types of business forms have to file accounts with Companies house annually and have Articles of Association and Memorandum of Association.

• Sole traders

• Private Limited Companies

• Partnerships

• Small charitable groups

In which type of business form is often suited where groups of professionals such as doctors, lawyers or accountants are able to pool their expertise to provide a range of services.

• Private Limited Companies

• Partnerships

• Public Limited Companies

• Community interest Companies

Which two types of business forms can raise finance through selling shares.

• Private Limited Companies

• Sole traders

• Partnerships

• Public Limited Companies

Which two are NOT disadvantages of becoming a Public Limited Company

• The business may struggle to raise finance, being reliant on owners savings

• The business's accounts and affairs will be in the public domain

• The business is overly controlled by the government

• The business will incur highly expensive legal fees and prospectus and advertising costs

Which type of business is most likely to become a private limited company so that the owners are able to enjoy limited liability?

• Chocolate factory requiring a large plant

• Mobile hairdresser requiring some initial hair product

• youtuber requiring a desk and PC

• An electrician requiring £500 of tools and a van.

Which is NOT a disadvantage of being a sole trader?

• They have unlimited liability and so may find it risky to finance the business through debt

• Banks often prefer to lend to more formal entities such as limited companies so accessing finance can be difficult

• Sole traders often have to work long hours and have noone to discuss ideas with

• They have to file accounts with Companies house and it can become expensive to become one