Business Structures and their Advantages and Disadvantages

Identify an advantage of being in a partnership:

• limited liability

• partners need to agree

• shared expertise and skills

• taxed through PAYE

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

• Business owned and run by 2-20 people

• Shared liability for any debts or legal requirements 

• Sole liability for any debts or legal requirements

• Shared profits among owners

What is a characteristic of a partnership?

• Business owned by an individual

• No need for an agreement between partners

• Shared liability for any debts or legal requirements

• Limited liability for business debts

How is a private limited company divided?

• Into departments

• Into equal parts called shares

• Among individual owners

• Among partners

Which of the following is NOT a feature of a sole trader?

• Business owned by an individual

• Needs to register with HMRC for self-assessment of income tax

• Shared liability for debts

• Sole control over business assets

What is a key feature of a Limited Liability Partnership?

• Business owners are personally liable for business debts

• The business is a public company

• Limited liability partnerships have limited liability

• Shares are available on the stock market

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

• Shared decision making

• Personally liable for any debts

• Pooled resources for start up

• Shared skills and expertise

What is an advantage of being in a partnership?

• No flexibility with holidays

• Profits are shared between partners

• Sole responsibility for business success

• No need for shared skills

What is a requirement for a business to be a Limited Liability Partnership?

• Must be a public company

• Must register with Companies House

• Must have shares on the stock market

• Must not have a memorandum of association

What is the main advantage of a private limited company?

• Business owners have full personal responsibility for debts

• The business is a separate entity with limited liability

• Shares are available to the public

• No need for a memorandum of association