Business organisations and financing

Question 1

What is a sole trader

Answer 1

A person who is in business on his or her own

Question 2

What is a Partnership

Answer 2

When two or more ( max 20 ) people set up in business

Question 3

Partnership act 1980

Answer 3

the relation which subsists between persons carrying on a business in common with a view of profit

Question 4

Partnership act 1980 accounting rules

Answer 4

Principally that profits and losses must be shared equally

Question 5

Partnership agreement covers :

Answer 5

Division of profits and losses between partners
Partners’ salaries
whether interest is to be allowed on capital and at what rate
whether interest is to be charged on parters’ drawings, and at what rate

Question 6

What is a limited company

Answer 6

A separate legal entity from its owners

Question 7

Companies act 2006

Answer 7

Owned by shareholders and managed by directors. Can be either public or private limited company

Question 8

Liability of shareholders

Answer 8

Limited to the amount of their investment and any money unpaid on their shares.