1.4.1 Business Start-ups Quiz: Ownership & Funding

What does the term "sole trader" mean in the context of business ownership?

• A business owned by two or more people

• A business owned and run by one person

• A business owned by shareholders

• A business owned by the government

What is a partnership in business?

• A business owned by a single individual

• A business listed on the stock exchange

• A business owned by two or more people who share responsibilities and profits

• A business owned entirely by the government

What does "limited liability" mean for a business owner?

• The owner is personally responsible for all debts of the business

• The owner's financial responsibility is limited to the amount they invested in the business

• The owner cannot take out any loans for the business

• The owner must share profits equally with all employees

Which of the following is a source of funding commonly used by start-up businesses?

• Corporation tax

• Bank loan

• National Insurance contributions

• VAT returns

What is a private limited company (Ltd) in the UK?

• A company that sells shares to the general public on the stock exchange

• A company owned solely by the government

• A company whose shares are not available to the general public (only family and friends) and has limited liability

• A company with unlimited liability for its owners

What is "crowdfunding" as a source of finance for a start-up?

• Borrowing money from a high street bank with interest

• Raising small amounts of money from a large number of people, typically via the internet

• Receiving a grant from the government with no repayment required

• Selling shares on the London Stock Exchange

What does "unlimited liability" mean for a sole trader?

• The sole trader cannot be held responsible for any business debts

• The sole trader's personal assets can be used to pay off business debts e.g. car /house

• The sole trader is protected from all financial losses

• The sole trader must have a minimum of two business partners

What does "retained profit" mean as a source of finance?

• Profit borrowed from a bank to reinvest in the business

• Profit earned in previous years that is kept within the business and reinvested

• Profit shared equally among all shareholders

• Profit paid to the government as tax

Which type of business ownership involves a "Deed of Partnership" to help set out who does what/profit sharing etc

• Sole trader

• Public limited company

• Partnership

• Franchise

A new business owner is deciding between setting up as a sole trader or a private limited company (Ltd). Which of the following is an advantage of choosing to operate as a sole trader?

• The owner benefits from limited liability

• The owner has complete control over all business decisions

• The owner can sell shares to the public to raise finance

• The owner is protected from personal financial loss if the business fails