Business Ownership Quiz

Who owns a Sole Proprietorship?

• A single person

• A government agency

• A group of partners

• A corporation

Answer explanation

A Sole Proprietorship is owned by a single person, who is responsible for all aspects of the business. This distinguishes it from other business structures like partnerships, corporations, or government agencies.

How many partners are needed for a Limited Liability Partnership (LLP)?

• Two or more

• Five or more

• No limit

• One

Answer explanation

A Limited Liability Partnership (LLP) requires at least two partners to form. This structure allows for shared management and liability protection, making 'Two or more' the correct answer.

What is the maximum number of shareholders in a Private Limited Company?

• 50

• 20

• 100

• Unlimited

Answer explanation

In a Private Limited Company, the maximum number of shareholders is capped at 50. This limit ensures that the company remains private and is not subject to the same regulations as public companies.

What is the capital structure of a Sole Proprietorship?

• Contributions from partners

• Shares issued to the public

• Entirely by the owner

• Loans from banks

Answer explanation

In a Sole Proprietorship, the capital structure is entirely by the owner, meaning all funds and resources are provided by the individual running the business, without contributions from partners or public shares.

Which business type is easier to set up?

• Corporation

• Private Limited Company

• Sole Proprietorship

• Limited Liability Partnership

Answer explanation

A Sole Proprietorship is the easiest business type to set up, requiring minimal paperwork and no formal registration, unlike Corporations or Limited Liability Partnerships which involve more complex legal requirements.

Which business type has limited access to funds?

• Sole Proprietorship

• All of the above

• Limited Liability Partnership

• Private Limited Company

In a Limited Liability Partnership, who shares the profits?

• The directors

• The owner

• The shareholders

• The partners

What type of liability does a Sole Proprietor have?

• Limited liability

• No liability

• Unlimited liability

• Shared liability

Who has full control over a Sole Proprietorship?

• The partners

• The owner

• The shareholders

• The board of directors

Answer explanation

In a Sole Proprietorship, the owner has full control over all business decisions and operations, unlike partners, shareholders, or a board of directors who share or delegate authority.

What happens to a Sole Proprietorship when the owner dies?

• It is terminated

• It becomes a partnership

• It continues indefinitely

• It is sold

Answer explanation

When the owner of a Sole Proprietorship dies, the business is terminated because it is not a separate legal entity. The business cannot continue without the owner.