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WorksheetsIGCSE Business Studies 1.4 Unincorporated and Ltd Companies Quiz
Total questions: 30
Worksheet time: 5mins
What is a sole trader?
An unincorporated business owned by two or more people
An unincorporated business owned and managed by one person
A business owned by shareholders
A government-owned business
What is one major advantage of a sole trader?
Limited liability
Ability to raise large amounts of capital
Complete control over business decisions
Easy access to international markets
Which of the following is a disadvantage of being a sole trader?
Limited control over the business
Difficulties in forming the business
Unlimited liability
Access to large loans
Which of the following best describes a partnership?
An unincorporated business owned by a single individual
A business where ownership is split among the government and individuals
An unincorporated business owned by two or more individuals who share profits
An incorporated business owned by two or more individuals
In a partnership, partners usually share profits:
According to the hours they work
Equally, unless agreed otherwise
Based on their educational background
In proportion to the number of employees they hire
Which of the following is a primary advantage of a partnership?
Limited liability for all partners
Increased availability of capital and expertise
Quick decision making
No need to pay any taxes
What does 'unlimited liability' mean?
The business can take out an unlimited amount of loans
Owners are responsible for debts only up to their initial investment
Owners are personally liable for all business debts
The business is free from any legal obligations
What type of liability do sole traders and partnerships have?
Limited liability
No liability
Unlimited liability
Partial liability
What is a private limited company (Ltd)?
A business owned by the government
A company whose shares are publicly traded on the stock market
A company owned by a small group of shareholders with limited liability
A business run by a single individual with unlimited liability
In a private limited company, who can buy shares?
Only the general public
Only people approved by current shareholders
Anyone over the age of 18
Only employees of the company
Which of these is an advantage of a private limited company?
Limited liability for shareholders
Complete control by one individual
Public disclosure of all financial records
Unlimited liability for shareholders
What is a disadvantage of a private limited company?
Limited liability
More paperwork and legal requirements
Complete control by one person
No access to shareholders
In a public limited company (PLC), shares are:
Only available to family members of the founder
Traded publicly on a stock exchange
Only given to employees
Not available to anyone
Which type of business ownership allows shareholders to buy and sell shares freely on the stock market?
Sole trader
Partnership
Private limited company
Public limited company
Which of the following is a major advantage of a public limited company?
Unlimited liability
Access to large amounts of capital through the sale of shares to the public
Simple and inexpensive to set up
Complete privacy of financial records
What is a potential disadvantage of public limited companies?
Limited liability
Limited access to capital
Loss of control for original owners
Simplified reporting requirements
Which type of ownership is characterized by limited liability?
Sole traders and partnerships
Private and public limited companies
Only partnerships
Only sole traders
Which business type is the easiest and least costly to set up?
Sole trader
Partnership
Private limited company
Public limited company
Which of the following best describes 'limited liability'?
Owners are liable only for the money they invested
Owners have no responsibility for the business's debts
Owners are personally liable for all business debts
The business can borrow unlimited funds
Which type of ownership typically has the most stringent reporting requirements?
Sole trader
Partnership
Private limited company
Public limited company
Which type of ownership is formed through the process of incorporation?
Sole trader
Partnership
Private limited company
Public limited company
Which type of business ownership is most likely to have continuity if the owner dies?
Sole trader
Partnership
Private limited company
Both sole traders and partnerships
Which type of business ownership allows a company to advertise and sell shares to the general public?
Sole trader
Partnership
Private limited company
Public limited company
Which business ownership type is likely to involve family members as shareholders?
Sole trader
Partnership
Private limited company
Public limited company
Which of these is NOT a benefit of incorporated businesses (limited companies)?
Shareholders have limited liability
The business has a separate legal identity from its shareholders
There are few legal formalities
Can sell shares to raise capital
Which of the following is NOT a characteristic of a public limited company?
Shares are sold on the stock exchange
Shares can be freely traded
Has limited liability for shareholders
Only has two owners
What is the term for the legal documents that must be submitted to form a limited company?
Memorandum and Articles of Understanding
Memorandum and Articles of Association
Limited Partnership Agreement
Certificate of Ownership
A private limited company is denoted by which abbreviation?
Ltd
PLC
LLC
Inc.
Which type of ownership might struggle to raise large amounts of capital?
Sole trader
Public limited company
Private limited company
Both private limited companies and public limited companies
Which type of business ownership might benefit most from economies of scale?
Sole trader
Partnership
Private limited company
Public limited company
