Forms of Business Quiz

Which of the following is a key feature of a sole trader?

• Limited liability

• Shared ownership

• Full control of decision-making

• Legal requirement to publish accounts

What is one major disadvantage of a partnership?

• High startup costs

• Unlimited liability

• Limited profit potential

• Lack of flexibility

Which business structure has shareholders as its owners but is not listed on the stock exchange?

• Public limited company (PLC)

• Sole trader

• Private limited company (Ltd)

• Cooperative

What is a key advantage of forming a public limited company (PLC)?

• Simple decision-making

• Limited liability

• Greater privacy of financial information

• Easier to manage daily operations

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

• Increased regulations

• Difficulty in raising finance

• Limited liability

• Complex tax requirements

What does 'unlimited liability' mean for a business owner?

• Owners are not responsible for the business's debts.

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

• Business debts are limited to the amount invested.

• Shareholders bear all the financial risk.

Which of these is an advantage of a partnership?

• Easier access to finance

• Limited liability

• Complete control over decisions

• Less legal responsibility

What is a cooperative?

• A business owned and run by its employees or members for mutual benefit.

• A type of sole trader with limited liability.

• A public company with a focus on profit maximization.

• A government-run enterprise.

Why might a business choose to operate as a private limited company (Ltd)?

• To raise large amounts of finance from the public

• To maintain control by limiting share distribution

• To avoid the costs of incorporation

• To reduce tax obligations

Which of these is a disadvantage of becoming a public limited company (PLC)?

• Limited liability for shareholders

• Loss of control due to wider ownership

• Reduced ability to raise capital

• Lack of access to international markets