Business Concepts Quiz

Which of the following is NOT typically a sole trader business?

• Gardener

• Plumber

• Electrician

• International bank

How much capital is generally required to set up a sole trader business?

• A large amount of capital

• No capital required

• Very little capital

• Unlimited capital

What is a potential risk of having all profits go to the sole trader?

• Increased tax liability

• Shared financial risk

• No financial risk

• Reduced personal income

What is one disadvantage of a sole trader related to financial responsibility?

• Limited Liability

• Unlimited Liability

• Shared Liability

• No Liability

What happens to losses in a partnership?

• Losses are not shared

• Losses are shared

• Losses are ignored

• Losses are doubled

What is a challenge partners face in decision-making?

• Decision-making is faster

• Decision-making can take longer

• Decision-making is eliminated

• Decision-making is simplified

What happens to shareholders' investments if a company with limited liability has debts?

• They lose all their personal savings.

• They lose only their investment in the company.

• They gain additional shares.

• They are required to pay off all debts.

What is the extent of shareholders' liability in a limited liability company?

• Unlimited liability.

• Limited to their investment.

• Limited to company profits.

• Limited to company debts.

What is the term for the share of profits received by shareholders?

• Interest

• Dividend

• Rent

• Fee

Can shareholders also act as directors in a limited company?

• Yes

• No

• Only if they are elected

• Only if they are employees