Business structures

Question 1

what are 2 advantages of a company?

Answer 1

Limited liability
Continuity of existence
Large investment- combine investments

Question 2

what are the 2 advantages of a partnership?

Answer 2

Partners can share skills and expertise

Partners can share risk

Question 3

what are the 2 advantages of a sole trader?

Answer 3

All profits are the property of the owner.

Easy to start and run

Question 4

What are the 2 disadvantages of a company?

Answer 4

Control is divided

Directors need to clearly understand their responsibilities

Question 5

what are the 2 disadvantages of a sole trader?

Answer 5

The owner takes all the responsibility for the business.

Sickness or holidays may cause problems.

Question 6

what are the 2 disadvantages of a partnership?

Answer 6

Personal assets may be sold

If one owner goes bankrupt the person assets of the others can be sold

Question 7

What is the definition of unlimited liability?

Answer 7

If the business fails the personal assets of the owner can be used to pay the business debts

Question 8

What is the definition of limited liability?

Answer 8

If the business fails the personal assets cannot be used to pay business debts