IGCSE Business Studies 1.4 Unincorporated and Ltd Companies Quiz

What is a sole trader?

• An unincorporated business owned by two or more people

• An unincorporated business owned and managed by one person

• A business owned by shareholders

• A government-owned business

What is one major advantage of a sole trader?

• Limited liability

• Ability to raise large amounts of capital

• Complete control over business decisions

• Easy access to international markets

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

• Limited control over the business

• Difficulties in forming the business

• Unlimited liability

• Access to large loans

Which of the following best describes a partnership?

• An unincorporated business owned by a single individual

• A business where ownership is split among the government and individuals

• An unincorporated business owned by two or more individuals who share profits

• An incorporated business owned by two or more individuals

In a partnership, partners usually share profits:

• According to the hours they work

• Equally, unless agreed otherwise

• Based on their educational background

• In proportion to the number of employees they hire

Which of the following is a primary advantage of a partnership?

• Limited liability for all partners

• Increased availability of capital and expertise

• Quick decision making

• No need to pay any taxes

What does 'unlimited liability' mean?

• The business can take out an unlimited amount of loans

• Owners are responsible for debts only up to their initial investment

• Owners are personally liable for all business debts

• The business is free from any legal obligations

What type of liability do sole traders and partnerships have?

• Limited liability

• No liability

• Unlimited liability

• Partial liability

What is a private limited company (Ltd)?

• A business owned by the government

• A company whose shares are publicly traded on the stock market

• A company owned by a small group of shareholders with limited liability

• A business run by a single individual with unlimited liability

In a private limited company, who can buy shares?

• Only the general public

• Only people approved by current shareholders

• Anyone over the age of 18

• Only employees of the company