Liability and Business Structures Quiz

What is the main characteristic of limited liability?

• Owners are personally responsible for all business debts.

• Owners' personal assets are protected from business debts.

• Business debts are shared equally among all employees.

• Business debts are paid by the government.

Which of the following best describes unlimited liability?

• Owners' personal assets are protected from business debts.

• Owners are personally responsible for all business debts.

• Business debts are shared equally among all employees.

• Business debts are paid by the government.

Which of the following is a characteristic of a sole trader?

• The business is owned by multiple shareholders.

• The business is owned and run by one individual.

• The business is required to publish its financial statements.

• The business has limited liability.

What is a key feature of a private limited company (Ltd)?

• Shares can be sold to the general public.

• Only members of the private limited company have the right to have the shares

• The company has unlimited liability.

• The company is owned by the government.

Which of the following is an advantage of being a sole trader?

• Limited liability.

• Easier to raise money.

• Complete control over business decisions.

• Shared responsibility for business debts.

What does limited liability mean for shareholders in a private limited company?

• They can lose their personal assets if the company goes bankrupt.

• They are only liable for the amount they invested in the company.

• They are responsible for the company's debts.

• They have to pay the company's taxes.

Which of the following is a disadvantage of a sole trader?

• Limited liability.

• Difficulty in raising money.

• Shared decision-making.

• Easy to transfer ownership.

What is one of the main benefits of forming a private limited company?

• Unlimited liability.

• Ability to sell shares to the public.

• Limited liability for shareholders.

• No need to register the company.

Which of the following is true about unlimited liability?

• It applies to private limited companies.

• It means owners' personal assets are at risk.

• It protects owners from business debts.

• It is a feature of public limited companies.

What is a common feature of a sole trader business?

• The business can sell shares to raise capital.

• The owner has unlimited liability.

• The business must have at least two owners.

• The business is required to publish its financial statements.