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WorksheetsU1 -The Bus Enterprise Environ - Ownership 2
Total questions: 10
Worksheet time: 21mins
Tina is a sole trader. She's been working as a self-employed child minder for last five years. She now wants to expand her business and is happy to offer share in ownership and is therefore considering various structures. However, she's keen to keep her business matters just the way, they are in terms of liability. Which structure would you advise her.
Partnership
Private Limited Company
Public Limited Company
Cooperative
Partnerships are usually set up by two or more people. What is the maximum number of partners per UK law?
10
20
30
40
50
In partnership the partners need to agree to following aspects. Choose answer(s) from below
How the profits will be shared
How much each partner will need to invest in the business
What is the responsibility of each partner in the business
How would they onboard a new partner or remove the one they no longer want
How the business decision making will be divided
In UK there are different types of partnerships, choose your answer(s) from the list below
Ordinary / General Partnership
Limited Partnership
Limited Liability Partnership
Incorporated Partnership
If any type of partnership falls below two persons for any reason, e.g. if there are only two individual partners and one dies, the remaining person can then choose to carry on the business as usual i.e. a partnership
True
False
Profits and losses are generally shared out equally between all the partners unless agreed otherwise and – all the partners are jointly and severally liable for all the debts and liabilities of the partnership.
All partners are entitled to take part in business decisions and the overall management of the business. Conversely, each partner is responsible for any acts or omissions of other partners acting “in the ordinary course of the business of the firm”. Such a situation is found under
General / Ordinary Partnership
Limited Partnership
Limited Liability Partnership
Incorporated Partnership
Under this partnership structure, its members/partners are not personally liable for any debts incurred by the partnership. Furthermore, legal responsibilities / duties to customers are generally not owed between partners. Instead they are owed by each partner to this partnership.
Whereas profits made by this partnership are distributed to partners, who are then responsible for paying their own personal income tax.
Ordinary / General Partnership
Limited Partnership
Limited Liability Partnership
Incorporated Partnership
This type of Partnership is not an incorporated business structure and does not have its own legal status.
Individual partners are still responsible for entering into contracts on behalf of other partners. However, in this partnership it is possible to designate certain partners as ‘limited partners’ who do not take part in the management of the partnership and, crucially, have limited liability (limited to their capital contribution) for any debts incurred by the partnership.
Limited partners, sometimes known as silent or sleeping partners, are normally investors who do not wish to take an active part in running the business. At least one partner in an this partnership must be a non-limited partner (referred to as a ‘general partner’) – they will have unlimited liability.
Ordinary / General Parnership
Limited Partnership
Limited Liability Partnership
Incorporated Partnership
Former colleagues and friends, Brian Acton and Jan Koum left Yahoo! to travel around South America. The WhatsApp idea, initiated by Kokum, gained inspiration from the old iPhone App Store. With many teething problems in the beginning, Kokum was close to giving up, but Acton was always there to encourage him to continue. Acton also used his strengths to persuade five former colleagues to invest in the business.WhatsApp now has a user base of over 900m. Obviously, the duo has different personal strengths, but playing to these is a winning combination. WhatsApp was acquired by Facebook in 2014 for a whopping $16bn.
Write 3 advantages and 3 disadvantages of Partnership
Once the partnership crosses 20 partners or expands beyond them, the partners may consider converting it into ........................... to retain control and ownership among them
Sole Trader
Private Limited Company
Public Limited Company
Cooperative
