Business Forms

Question 1

What are examples of a unincorporated business?

Answer 1

Sole traders
Partnerships

Question 2

What are examples of incorporated businesses?

Answer 2

Private limited company (ltd)
Public limited company (plc)

Question 3

What are the benefits of a sole trader?

Answer 3

• 100% of profit
• 100% control
• income taxes
• little bureaucracy

Question 4

What are drawbacks of sole traders?

Answer 4

• unlimited liability
• income tax -> increases when profit increases
• harder to raise financially -> limited funds of their own
• business suffers if owner is ill, holiday or loses interest

Question 5

What are benefits of private limited companies (ltd)?

Answer 5

• limited liability
• corporation tax
• controls who buys shares

Question 6

What are drawbacks of a private limited company (Ltd)?

Answer 6

• corporation tax -> first profit made goes through a tax
• shared profits
• greater bureaucracy