4.sole Proprietors And Partnerships

Question 1

Sole proprietor

Answer 1

Unincorporated business owned by one person. Also known as a sole trader.

Question 2

Start up capital

Answer 2

Money needed to start up new business. Usually provided by owner of the business.

Question 3

Economies of large scale of production

Answer 3

These occur when scale of business activity increases, resulting in a reduction in the average costs of production

Question 4

Silent or sleeping partner

Answer 4

Person who had invested capital into a business activity but who does not take an active part in the running of the business

Question 5

Deed of partnership

Answer 5

Legal agreement drawn up between the partners of the business stating the responsibilities of partners- for instance, how profits and losses are to be shared; how the business is to operate.

Question 6

LLP (limited liability partnership)

Answer 6

New form of business organisation which trades as a partnership but with limited liability.