Types of Business Organisation Quiz

What is a sole trader?

• A business owned and controlled by one person

• A business with many shareholders

• A government-owned firm

• A company registered under the Companies Act

Which is an advantage of being a sole trader?

• Easy to start and manage

• Complex legal procedures

• Shared profits

• Limited control

A sole trader keeps:

• All the profits

• Half the profits

• None of the profits

• Profits shared with government

What is unlimited liability?

• The owner is personally responsible for all debts

• The owner’s losses are limited

• The business cannot go bankrupt

• The owner has insurance protection

Which is a disadvantage of a sole trader?

• Unlimited liability

• Limited independence

• Difficult to make decisions

• Too many owners

A sole trader often lacks:

• Capital for expansion

• Full control

• Customer contact

• Flexibility

Which type of business has the simplest legal setup?

• Sole trader

• Partnership

• LTD

• PLC

When a sole trader dies, the business:

• Usually ends

• Automatically continues

• Becomes a partnership

• Turns into a company

Which of the following best suits a sole trader?

• Small local shop or barber

• National supermarket chain

• Public corporation

• Law firm

Sole traders often find it difficult to:

• Raise large amounts of finance

• Make independent decisions

• Keep control

• Hire employees