Types of Businesses

What is the most common legal business structure in Australia?

• Partnerships

• Corporations

• Sole traders

• Cooperatives

What is meant by limited liability?

• Owners are personally responsible for all debts

• Owners are not responsible for any debts

• Owners are only responsible for debts up to the amount they invested

• Owners share all profits equally

How does a franchise agreement work?

• It allows a person to use the name, products, and services of an existing business

• It merges two companies into one

• It allows a business to operate without any legal agreements

• It provides complete ownership of a new business

What is a key feature of a cooperative?

• It is owned by a single individual

• It requires at least five members with equal voting rights

• It is the most expensive business structure to set up

• It provides no voting rights to its members

What is a primary advantage of partnerships?

• They are the most expensive to set up

• They provide limited liability to owners

• They are cheaper to set up than companies

• They require no legal agreements

What is a disadvantage of sole traders?

• They have limited liability

• They are difficult to set up

• Owners are fully responsible for business debts

• They require multiple owners

What is a characteristic of corporations?

• They are not considered separate legal entities

• They provide limited liability to owners

• They are the easiest to set up

• They require no shareholders

What is a common feature of franchises?

• They do not follow any business model

• They allow complete independence from the franchisor

• They follow a proven business model

• They require no fees or profit sharing

What is a benefit of cooperatives?

• They are owned by a single person

• They provide unequal voting rights

• They make each member feel valued as equals

• They are the most expensive to maintain

What is a responsibility of partners in a partnership?

• They have no responsibility for business decisions

• They are accountable for the failures of the business

• They are not involved in the business operations

• They do not share any profits