Business Structure Quiz

What is the primary characteristic of a sole trader?

• Owned by multiple people

• Limited liability

• Owned and run by one individual

• Shares traded on the stock market

What is a franchise?

• A type of public limited company.

• A business model where a franchiser allows another business to trade under its name.

• A company with limited liability.

• A type of private limited company.

What is one advantage of being a sole trader?

• Unlimited liability

• Harder to raise money

• Own boss and flexible decisions

• High start-up costs

What does "unlimited liability" mean?

• Limited responsibility for debts

• No need to pay debts

• Owner must pay all debts, even with personal assets

• Business is protected from debts

Which type of business is typically easiest to start?

• Corporation

• Partnership

• Sole Trader

• Cooperative

What is a key advantage of a partnership?

• Sole responsibility for decisions

• More capital can be raised

• Unlimited liability

• Profits are not shared

In a partnership, how are profits typically shared?

• Equally among partners

• Based on the amount of capital each partner invested

• According to the partnership agreement

• None of the above

What is a disadvantage of being a sole trader?

• Easy to set up

• Unlimited liability

• Keep all the profits

• No need to employ staff

What is a disadvantage of a partnership?

• Shared responsibility

• Access to more skills

• Business partners might argue

• Easier to close down

What is a characteristic of a private limited company (Ltd)?

• Shares are publicly traded

• Often small and family-run

• Unlimited liability

• No shareholders