WorksheetsLegal Structures Review (12D 2023-24)
Total questions: 12
Worksheet time: 6mins
Which of the following best describes the term limited liability? If the business fails:
Personal possessions of the owner can be taken to pay any debts
The owner is personally liable for all the debts of the business
There is no limit on the amount the owner has to pay to settle debts
The owner only loses the amount invested in the business
Which type of legal structure is used when two or more people join together to start a business and have unlimited liability?
Sole trader
Partnership
LTD
PLC
What are the owners of private and public limited companies called?
Stakeholders
Managers
Board of directors
Shareholders
Which of the following is an advantage of operating a large established business as a public limited company?
Shares can be sold to the public to raise additional finance
Financial accounts are published
Shares can only be sold to invited investors to raise finance
Owners have unlimited liability
A private limited company may change into a public limited company because it wants:
Limited liability
To raise additional finance
Unlimited liability
To avoid takeover
Which of the following statements is always true of a public limited company?
Shareholders have day to day control of the company
Liability is limited
The ability to expand is limited
Board of directors own the business
Which legal structure would an individual wishing to start-up a small business choose because it is quick, easy and inexpensive to set up?
Sole trader
Partnership
LTD
PLC
Owners are not personally liable for the firm's debts, only for the amount of contributed capital, this is...
unlimited liability
limited liability
franchising
A business run by 2-20 people and has unlimited liability is known as a:
Company
Sole trader
Partnership
Advantages of a partnership are:
The partners split the profit
Unlimited liability
Raise more capital than a sole trader
Share the workload
True or false, you can legally have a Limited Liability Partnership?
True
False
Private Limited Companies are owned by
Sole Traders
Partners
Shareholders
The Government
