Forms of Ownership Quiz

What is a Sole Proprietorship?

• A business owned by two or more people

• A business owned by one person

• A company whose shares are sold to the public

• A business owned by a group of members

Which of the following is an advantage of a Sole Proprietorship?

• Business ends if owner dies

• Difficult to raise money

• Owner keeps all the profits

• Unlimited liability

What is a Partnership?

• A business owned by one person

• A company owned by shareholders

• A small business owned by 1-10 members

• A business owned by two or more people

What is a disadvantage of a Partnership?

• Easy to form

• More capital than a sole trader

• Limited liability

• Profits must be shared

What is a Close Corporation (CC)?

• A business owned by one person

• A small business owned by 1-10 members

• A business owned by a group of members

• A company whose shares are sold to the public

Which of the following is an advantage of a Close Corporation?

• More expensive to set up

• Limited to 10 members

• Not easy to transfer ownership

• Members have limited liability

What is a Private Company (Pty) Ltd?

• A company owned by shareholders, shares sold to the public

• A small business owned by 1-10 members

• A company owned by shareholders, shares not sold to the public

• A business owned by one person

What is a disadvantage of a Private Company?

• More credibility than sole traders

• Limited liability

• Easier to raise capital

• More expensive and complicated to start

What is a Public Company (Ltd)?

• A small business owned by 1-10 members

• A business owned by one person

• A company whose shares are sold to the public

• A company owned by shareholders, shares not sold to the public

Which of the following is an advantage of a Public Company?

• Limited liability for shareholders

• Risk of takeovers

• Very expensive to start

• Less privacy