Types of business organizations

Which of the following is a disadvantage of becoming a sole trader?

• you keep all the profit

• you have unlimited liability

• you have full control over your business

• the business is easy to set up

What does the word “limited” after a business name indicate?

• the number of owners is limited

• there is a limit to the number of loans that can be issued

• the owners’ liability for the debts of the business is limited

• there is a limit to the number of businesses of this type

A limited company must have which of these following?

• unlimited liability

• the ability to sell shares to friends and family

• an auditor checks on its financial statements

• a government-run business

Which best describes the term “limited liability”?

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

• the owner is only responsible for the assets of the business

• the owner is only liable for the money they have invested in the business

• the owner in only liable for the taxes that are paid by the business

Which of the following is a disadvantage of a partnership?

• increased capital or equity

• increased workload

• increased knowledge

• increased arguments

An unincorporated business is one that does have a separate legal identity.

• True

• False

These are all true characteristics of a private limited company except:

• Limited liability

• More available capital

• Incorporated business

• The business and the owner don't have separate identities

What is the advantage of corporations?

• Short life span

• It has one owner

• Minimal government regulation

• Limited liability

Unlimited liability is when the owner is only limited to the amount they invested.

• True

• False

An entrepreneur:

• Manages financial investments

• Sets the interest rates at banks

• Enforces government regulations

• Takes the risk to earn profit