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WorksheetsLegal structures
Total questions: 12
Worksheet time: 13mins
When an entrepreneur first starts up a new business, he or she must decide what legal structure the business should adopt. Most new businesses start as ________ _____________ (i.e one individual owns and runs the firm).
(a)
Others start as (a) where between 2 and 20 people own and run the business.
Both sole traders and partnerships have unlimited liability, this means that there is no distinction drawn between the individual and the business and therefore if the business collapses, the owners can lose not only the money they invested but also their __________________ __________________.
(a)
Alternatively, an individual can create a separate legal identity for the business by forming a(n) (a) company.
This means that by law the owners of the business and the company itself are now two different things. This provides the owners with _______________ ___________________ (i.e. they can only lose what they put into the business and not personal assets.
(a)
Provide an example of type of business that should not start up as a sole trader or partnership and explain why.
Explain why the support of limited liability can encourage entrepreneurs to be bolder (braver) in their risk-taking.
Another name of top management is board of directors.
True
False
Dividends are declared only if the directors decide to do so.
True
False
If an shareholder in Public Limited Company would like to sell share to an outsider, all other shareholders have to agree.
True
False
Even if you only own one share in a public company, you can ask the Chairman a question at the Annual General Meeting.
True
False
Partnership business needs to publish financial accounts to the Registrar every year.
True
False
