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Business > Business Ownership > Flashcards

Business Ownership Flashcards

1
Q

What are the two types of liability?

A
  1. Unlimited Liability
  2. Limited Liability
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2
Q

What is unlimited liability?

A

The owner is entirely responsible for the company’s debt and personal assets may be taken and sold if the owner cannot pay it off.

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3
Q

What is limited liability?

A

The owner is considered separate from the company and is not responsible for the company’s debt.

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4
Q

What are the people called that a company owes money to if the company has unlimited liability?

A

Creditors.

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5
Q

What are the different types of business ownership?

A

Sole Trader
Partnership
Private Limited Company (Ltd)
Public Limited Company (Plc)

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6
Q

What is a sole trader?

A

A sole trader business has only one owner.

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7
Q

Does a sole trader business have limited or unlimited liability?

A

Unlimited Liability

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8
Q

What organisation does sole trader and partnership companies have to register to?

A

His Majesty’s Revenue and Customs
They collect tax money for the government.

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9
Q

What are the advantages of a sole trader business?

A

Easy to set up
Only have to pay tax on profits the business makes
Can operate more privately
Owner decides what happens to the profits

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10
Q

What are the disadvantages of a sole trader business?

A

Owner has to work long hours
Owner is responsible for most of the jobs
Company has unlimited liability

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11
Q

What is a partnership?

A

A partnership business has more than two owners.

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12
Q

Does a partnership company have limited or unlimited liability?

A

Unlimited Liability

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13
Q

Define the term ‘deed of partnership’?

A

A deed that partners of partnership companies agree to that decides who gets what share of the profits?

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14
Q

What are the advantages of a partnership business?

A

More people to share ideas and work
More capital to invest in the company

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15
Q

What are the disadvantages of a partnership business?

A

Each partner is legally responsible for what all the other partners do
Often have disagreements among partners
When a partner dies, the partnership has to start over
Company has unlimited liability

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16
Q

What organisation does a private limited company have to register to?

A

Companies House

17
Q

What organisation does the owner and employees have to register to?

A

His Majesty’s Revenue and Customs

18
Q

Does a private limited company have limited or unlimited liability?

A

Limited Liability because the owner is considered an employee and is legally separate from the company

19
Q

What are owners in a private limited company and a public limited company also known as?

A

Shareholders

20
Q

When do private limited companies have to pay tax?

A

On every monthly wage

21
Q

What are the advantages of a private limited company?

A

Seen as more professional than a sole trader company
When a sole trader dies, the company carries on as normal.

22
Q

What are the disadvantages of a private limited company?

A

The company has to submit their annual accounts to companies house which anyone can view.
More paperwork
Expensive to set up

23
Q

How can a person buy shares of a private limited company?

A

The shareholders have to agree to invite a person in.

24
Q

What are the minimum number of shareholders a private limited company can have?

A

At least two

25
Q

Do directors of a private limited company need to be shareholders?

A

No

26
Q

Does a public limited company have limited or unlimited liability?

A

Limited Liability

27
Q

Can anyone buy shares of a public limited company?

A

Yes

28
Q

Are public limited companies big or small?

A

Big because lots of people can buy shares at any time and therefore have lots of money coming in for investment

29
Q

What are the advantages of a public limited company?

A

When a shareholder dies, the business carries on as normal.
The company can expand quickly.

30
Q

What are the disadvantages of a public limited company?

A

Expensive set up
Need a certain amount of money to start
A bigger business can easily buy all the shares of the company and take over.

31
Q

Do shareholders of a public limited company get a say in how the company is run?

A

No

Business (10 decks)

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