Business Organizations

Question 1

What are two different forms of business structures, and give examples of each

Answer 1

1. Unincorporated - solo trader and partnership

2. Incorporated - registered company

Question 2

What are the advantages and disadvantages of a sole trader?

Answer 2

Advantages

• Own boss
• No specific legal formalities

Disadvantages
- Personal liability to firm actions

Question 3

What is the definition of a partnership?

Answer 3

At least two people who are carrying on a business with a view for profit

Question 4

What are the terms of the Partnership Act?

Answer 4

1. Every partner is entitled to particle in management of business
2. Every partner could claim an equal share of profits

Question 5

What is the liability in a partnership?

Answer 5

• Partners are jointly and severally liable for the torts fo a partner
• There is personal liability for the debts of the partnership