Business Structures and Their Advantages & Disadvantages

Daniel is considering starting his own small business as a sole trader. Which of the following is an advantage he would have by choosing this business structure?

• Independence

• Limited liability

• Shares can be traded on the Stock Exchange

• Extra legal duties

Henry and Elsie decide to start a bakery together as a partnership. What is a disadvantage they might face?

• Possible disagreements between partners

• Limited liability

• Shares can be traded on the Stock Exchange

• Profits retained by owner

Kiara wants to start a business that provides limited liability and allows its shares to be traded on the Stock Exchange. Which business structure should she choose?

• Public limited company (plc)

• Sole trader

• Partnership

• Private limited company

Amelia wants to start a business as a private limited company. What is a requirement she must fulfill?

• Must be registered with Companies House

• Profits retained by owner

• No limited liability

• Shares can be traded on the Stock Exchange

Neha and Lily are considering starting a business together. They are attracted to a business structure that offers the advantage of "extra capital available from partners." Which business structure are they considering?

• Partnership

• Sole trader

• Private limited company

• Public limited company (plc)

Sophia is considering turning her private company into a public limited company. Why might Sophia's company have less confidentiality if she does this?

• Because affairs are in the public domain

• Because it is easy to set up

• Because of shared responsibilities

• Because of personal responsibility for debts

Aarav is starting a small business on his own and is considering different business structures. He learns that one option has the disadvantage of "personal responsibility for debts." Which business structure is Aarav most likely considering?

• Sole trader

• Private limited company

• Public limited company (plc)

• None of the above

Sophia is considering starting a business and is researching different types of companies. She learns about private limited companies. Which of the following is a characteristic of a private limited company?

• Traded on the Stock Exchange

• Unlimited liability

• Shares are not available to the general public

• Owned by a single individual

Mia is considering starting her own bakery as a sole trader. What is one potential disadvantage she might face?

• Complex legal requirements

• Shared decision making

• Ability to raise capital easily

• Unlimited liability for debts

Sebastian, Kiara, and Arthur are a group of professionals who want to work together, share responsibility, and split the profits from their business. Which business structure would be most suitable for them?

• Partnership

• Sole trader

• Public limited company (plc)

• Franchise