1.3 Business Ownership

Question 1

4 types of business ownership

Answer 1

Sole trader
Partnership
Private limited company (Ltd)
Public limited company (Plc)

Question 2

Who owns sole trade business?

Answer 2

One person has sole responsibility

Question 3

Who owns partnership business?

Answer 3

2-20 partners who each bring a skill

Question 4

Who owns a Ltd and Plc

Answer 4

Shareholders

Question 5

Where do soletraders get investment from?

Answer 5

They raise all capital and raise all start up cost

Question 6

Where do partnerships get money from?

Answer 6

-Comes from the partners
- You have to buy in to be a partner

Question 7

Where do Ltds get start up money from?

Answer 7

Owners or shareholders

Question 8

Where to Plcs get start up money from?

Answer 8

-Investment from shareholders
- Banks are likely to invest because Plcs have a small risk

Question 9

What businesses have shareholders?

Answer 9

Plcs and Ltds

Question 10

Difference between shareholders in Ltds and Plcs

Answer 10

• In Ltds, you can only sell shares to family and friends
• In Plc l, you can sell shares to anyone

Question 11

What businesses have unlimited liability?

Answer 11

Sole trader and partnership

Question 12

What is unlimited liability?

Answer 12

• Means you can lose everything
• The business has no separate legal identity; the business and the owners personal possessions are linked

Question 13

What businesses have a limited liability?

Answer 13

Plcs and Ltds

Question 14

What is limited liability?

Answer 14

Your personal possessions have a separate legal identity; you can only lose what you put in

Question 15

What is limited liability?

Answer 15

Your personal possessions have a separate legal identity; you can only lose what you put in

Question 16

What legal things do sole traders have to do to set up?

Answer 16

Let the Inland revenue know so you can pay business tax

Question 17

What legal things do partnerships have to do to set up?

Answer 17

• Draw up a DEED OF PARTNERSHIP
• Let the Inland revenue know so you can pay business tax

Question 18

What is a deed of partnership?

Answer 18

A document that details job roles, who invested what and what each partner is entitled to

Question 19

What legal things do a Ltd have to do to set up?

Answer 19

• The business name has to have Ltd in it
• You have registered your company’s house and they will give you a certificate of corporation
• Let the Inland revenue know so you can pay business tax

Question 20

What do Plcs have to do to set up?

Answer 20

• Register with company’s house so you can get a CERTIFICATE OF CORPORATION
• Let the Inland revenue know so you can pay business tax
  -Plc has to be in the name
• Company reports must be made public
• Have to hold an annual meeting and invite all shareholders

Question 21

Who gets profit in sole trader?

Answer 21

The sole trader

Question 22

Who gets profit in partnership?

Answer 22

Partners

Question 23

Who gets profit in Ltds and Plcs?

Answer 23

DIVIDEND is paid to shareholders

Question 24

What is a dividend?

Answer 24

• A sum of money paid regularly (typically annually) by a company to its shareholders out of its profits