Business Topic 1.4

Question 1

Bankrupt

Answer 1

when an individual is unable to pay their debts, even after all personal assets have
been sold for cash.

Question 2

Limited liability

Answer 2

restricting the losses suffered
by owners/shareholders to the sum they invested
in the business.

Question 3

Private limited company

Answer 3

a small family business
in which shareholders enjoy limited liability.

Question 4

Sole trader

Answer 4

a business run by one person; that person has unlimited liability for any business debts.

Question 5

Unlimited liability

Answer 5

treating the business and
the individual owner as inseparable, therefore
making the individual responsible for all the
debts of a failed business.

Question 6

Franchising

Answer 6

paying a franchise owner for the
right to use an established business name,
branding and business methods.

Question 7

Royalties

Answer 7

percentage of the sales revenue to be paid to the overall franchise owner.

Question 8

Entrupreneur

Answer 8

a person who sets up a business and takes on financial risks in the hope of profit.