Business Structures Quiz

Which of the following is a key characteristic of a sole trader?

• Limited liability

• Owned by up to 50 shareholders

• Business is legally separate from the owner

• Full control over business decisions

What is the main disadvantage of a sole trader structure?

• Limited liability

• Heavy workload and personal responsibility

• Easy access to capital

• Shared decision-making

Which of the following business structures has unlimited liability?

• Sole trader and partnership

• Private company

• Public company

• None of the above

In a partnership, business ownership is shared by how many people?

• 2–50

• 1–10

• 2–20

• 10–100

What is a major advantage of a partnership over a sole trader?

• Limited liability

• More capital can be raised

• Full control over business decisions

• No conflicts between owners

Which of the following is a disadvantage of a partnership?

• The business continues even if a partner leaves

• Shared workload and skills

• Potential for disagreements between partners

• Easier access to capital

A private company (Pty Ltd) can have up to how many shareholders?

• 20

• 50

• 100

• Unlimited

What is one benefit of a private company over a sole trader?

• Limited liability

• No legal requirements

• Full control over business decisions

• Easy and inexpensive to set up

Why is a public company different from a private company?

• Public companies are owned by one person

• Private companies have unlimited liability

• Public companies can sell shares to the public

• Private companies can have unlimited shareholders

What is a disadvantage of a public company?

• It is difficult to raise capital

• Owners have unlimited liability

• It cannot trade shares

• It must disclose financial information to the public