tq4 ch1.1 Business Legal Forms

What is the main purpose of commercial organisations (businesses)?

• To operate at a surplus

• To maximise value for money

• To increase the wealth of its owners

• To provide a benefit to the public

Which type of organisation is concerned with non-profit and philanthropic goals as well as social well-being?

• Charities

• Co-operatives

• Non-governmental organisations

• Public sector organisations

What is the main difference between a sole trader and a partnership?

• Management structure

• Ability to raise capital

• Liability for the unpaid debts

• Number of owners

What is the main advantage of a limited liability partnership (LLP)?

• More regulation

• Hard for the business to grow beyond a certain size

• Personal liability for losses

• Limited liability for partners

What is the main advantage of a public limited company (PLC)?

• More regulation

• Personal liability for losses

• Shareholders have limited liability

• Hard for the business to grow beyond a certain size

What is the main purpose of an alliance between companies?

• To spread the cost or risk of large projects

• To satisfy regulations from several jurisdictions

• To set out the duties and obligations of each member of the alliance

• To manage the alliance more complicated

What is the main advantage of a group of companies?

• Requires high level of skill to manage the group

• Can result in very large businesses

• More regulation

• International groups must satisfy regulations in each jurisdiction

What is the main characteristic of a public limited company (PLC)?

• Owned by one person

• Business managed by its owners

• Personal liability for losses

• Shareholders have limited liability

What is the main characteristic of a limited liability partnership (LLP)?

• Owned by one person

• Business managed by its owners

• Personal liability for losses

• Shareholders have limited liability

What is the main characteristic of a partnership?

• Personal liability for losses

• Shareholders have limited liability

• Business managed by its owners

• Owned by one person