Unit 2 - Self Employment Trading Practices

What does self-employment mean?

• Working for a large corporation

• Being employed by the government

• A person that runs their business themselves and takes responsibility for its success or failure

• Working part-time for different companies

What can businesses be classified as?

• Non-profit organisations only

• Government entities

• Profit or non-profit organisations

• Charities exclusively

Which of the following is NOT a type of self-employment?

• Sole Trader

• Partnership

• Limited Company (Ltd)

• Corporation

What is a sole trader?

• A company with multiple shareholders

• A self-employed person who owns and runs their own business as an individual

• A legal entity with a separate identity from its owner

• A partnership between several individuals

Does a sole trader business have a legal identity separate from its owner?

• Yes, it has a separate legal identity

• No, it does not have any legal identity separate from its owner

• Yes, but only for tax purposes

• No, but it is considered a separate entity for accounting purposes

What are sole traders responsible for in terms of their business finances?

• Only for the profits they make

• For funding the running of the business and keeping records of all monies coming in and out

• For the debts of other businesses

• They have no financial responsibilities

What happens if a sole trader's business does not make a profit?

• The government funds the losses

• They are not responsible for any debts

• They are personally responsible for repaying debts which could lead to the loss of personal assets

• The business is dissolved without any personal consequences

How do partnerships differ from sole traders?

• Partnerships have only one person in charge.

• Partnerships do not share the responsibility of running the business.

• Partnerships have two or more people in charge who share the responsibility of running the business.

• Partnerships do not allow sharing of business profits.

What do partners in a partnership share?

• Only the business profits.

• Only the decision-making process.

• Business profits, losses, and responsibilities such as bills to buy stock or equipment.

• Only the financial strain of running the business.

What is one of the benefits of forming a partnership?

• Partnerships complicate the decision-making process.

• Partnerships increase the mental strain of running a business.

• Partnerships restrict the financial strain to one person.

• Partnerships enable the financial and mental strain of running a business to be shared.