Understanding Business Ownership Types

What is the primary characteristic of a sole trader business?

• It is owned by multiple shareholders.

• It is owned and operated by one individual.

• It is a non-profit organisation.

• It is a government-owned entity.

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

• Limited liability.

• Easy to set up and manage.

• Access to large amounts of capital.

• Shared decision-making.

What does 'limited liability' mean in the context of a limited liability company (LLC)?

• Owners are personally responsible for all business debts.

• Owners' personal assets are protected from business debts.

• The company cannot incur any debts.

• The company is exempt from paying taxes.

Which of the following is a type of business ownership?

• Sole trader.

• Partnership.

• Corporation.

• All of the above.

What is a franchise?

• A business owned by the government.

• A business model where individuals can buy the rights to operate a branch of an established company.

• A type of sole proprietorship.

• A non-profit organisation.

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

• Unlimited liability.

• Complex to set up.

• High start-up costs.

• Limited control over business decisions.

In a limited liability company, who is responsible for the company's debts?

• The shareholders.

• The directors.

• The company itself.

• The government.

Which of the following is a benefit of owning a franchise?

• Complete creative freedom.

• Established brand recognition.

• No initial investment required.

• No need to follow any guidelines.

What is one key difference between a partnership and a sole trader?

• A partnership has limited liability.

• A partnership involves two or more people sharing ownership.

• A sole trader requires more paperwork to set up.

• A sole trader has more access to capital.

Which of the following is a characteristic of a limited liability company?

• It is owned by a single individual.

• It combines elements of partnerships and corporations.

• It cannot issue shares.

• It is exempt from all taxes.