Understanding Business Ownership Types

Organize these characteristics into types of ownership

Groups:

(a) Sole Trader

,

(b) Partnership

,

(c) Private Limited Company

• High levels of skill and experience

• Skills and experience can be shared

• Very little control

• Lots of finance available from shareholders.

• Multiple people contribute to finances

• Shared risk due to unlimited liability

• Skills and experience may be limited

• High level or risk due to unlimited liability

• Smaller risk due to limited liability

• High level of control

• Finance is very limited

• Medium level of control

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

• Limited liability

• Shared decision-making

• Single owner

• Complex to set up

What is a key feature of a private limited company?

• Unlimited liability

• Shares can be sold to the public

• Limited number of shareholders

• No legal distinction between owner and business

Which of the following best explains 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

• There is no legal distinction between the business and its owners

What is a risk associated with unlimited liability?

• Business debts are limited to the amount invested

• Owners' personal assets can be used to pay business debts

• Business can easily raise capital by selling shares

• Owners have no legal responsibility for business debts

Which of the following is a characteristic of a partnership?

• Single owner

• Limited liability

• Shared decision-making

• Shares can be sold to the public

What is an advantage of being a sole trader?

• Limited liability

• Easy to set up and manage

• Ability to sell shares to raise capital

• Shared decision-making

Which of the following is a disadvantage of a private limited company?

• Unlimited liability

• Complex and costly to set up

• Single owner

• No legal distinction between owner and business

What does unlimited liability mean for business owners?

• They are only responsible for business debts up to the amount they invested

• They have no legal responsibility for business debts

• Their personal assets can be used to pay off business debts

• They can sell shares to the public to raise capital

Which of the following is an advantage of a partnership?

• Limited liability

• Ability to raise capital by selling shares

• Shared responsibility and expertise

• No legal distinction between owners and business