Sole Trader & Partnerships

What is the legal structure of a sole trader?

• The legal structure of a sole trader is that the business and the owner are considered the same entity.

• The legal structure of a sole trader is that the business is a corporation.

• The legal structure of a sole trader is that the business is a partnership.

• The legal structure of a sole trader is that the business is owned by multiple individuals.

Name the two types of partnerships.

• Sole Partnership

• Unlimited Partnership

• Exclusive Partnership

• General Partnership, Limited Partnership

In a general partnership, how is the liability distributed among partners?

• Liability is distributed based on the age of each partner.

• Liability is distributed based on the number of years each partner has been in the partnership.

• Liability is distributed equally among partners in a general partnership.

• Liability is distributed based on the amount of capital invested by each partner.

What is the liability of limited partners in a limited partnership?

• Shared

• Unlimited

• Complete

• Limited

How is the liability shared in a limited liability partnership?

• Liability is shared based on the number of employees in the business.

• Liability is shared based on the location of the business.

• Liability is shared equally among all partners.

• Liability is shared based on each partner's investment in the business.

What is the main advantage of a sole trader business structure?

• Access to more capital

• Limited liability protection

• Owner has complete control over decision-making and keeps all profits.

• Lower tax rates

What is the main disadvantage of a general partnership?

• Limited control over decision-making

• Personal liability for debts and obligations

• Complex tax reporting requirements

• Unlimited liability for debts

Can a sole trader have partners in the business?

• Sometimes

• Maybe

• No

• Yes