Business Ownership

Question 1

What is a sole trader

Answer 1

A sole trader runs and owns their own business

Question 2

What is a partnership

Answer 2

We’re 2 or more people own a business (up to 20 people), you need a deed of partnership.

Question 3

What is a deed of partnership

Answer 3

This will detail each partners responsibilities

*By signing This it will form the partnership.

Question 4

What does LTD stand for

Answer 4

Private limited company

Question 5

What does PLC stand for

Answer 5

Public limited company

Question 6

What is market share

Answer 6

The percentage of the total market that one particular brand or business owns

Question 7

What is unlimited liability

Answer 7

They are personally responsible for all debts run up by the business

Question 8

Assets

Answer 8

Something you own

You can sell

Question 9

Limited finance

Answer 9

You are less likely to get a loan because of bad credit history
E.g. Went bankrupt

Question 10

How much money worth of shares must you have to own a plc

Answer 10

£50,000

Question 11

Can a plc sell shares to the public

Answer 11

Yes

Question 12

Who can a ltd sell shares to

Answer 12

Fiends and family

Question 13

What type of business can Competitors can see your financial info

Answer 13

Ltd

Question 14

One benefit of a sole trader

Answer 14

Cheap and easy to set up 
All profits go to you 
Competitors can't see your account.
Highly motivated 
You are the boss

Question 15

Disadvantage of a sole trader

Answer 15

Unlimited liability 
Limited finance 
Difficult to find cover when Ill 
Few specialist skills 
They can loose there assets to pay if debts run up by the business

Question 16

What are sleeping partners

Answer 16

Invest in, but do not run the business

Question 17

Deed of partnership

Answer 17

Will detail each partners responsibilities

Question 18

Benefits of a partnership

Answer 18

Risks and responsibilities are shared
More specialist skills simple and flexible
Competitors can’t see your account
Easier to raise finance

Question 19

Drawbacks of a partnership

Answer 19

Unlimited liability
Arguments can occur between partners
If a partner dies or resigns the partnership is dissolved
Trust becomes a significant element between partners

Question 20

Private limited companies have to send a”..1….”and a”..2..”

Answer 20

1. Memorandum if association

2. Articles of association

Question 21

What does a ltd send to companies house each year

Answer 21

A true a fair set of accounts

Question 22

Benefits of a ltd

Answer 22

Limited liability
Increased sources of finance
More expertise available
Difficult for hostile takeovers to occur

Question 23

Drawbacks of an ltd

Answer 23

Competitors can see financial information
Difficult to sell shares for individual shareholders
Other shareholders have to agree
Greater legal constraints
Can’t sell shares to the general public

Question 24

Benefits of a plc

Answer 24

Large stable companies-more access to finance from banks
Enhanced reputation
Exposure through the stock exchange

Question 25

Drawbacks of a pls

Answer 25

Flotation is expensive and not guaranteed chances of success
Financial info is freely available
Strict rules in regulations