Different types of businesses p1 Flashcards
1
Q
What is a sole trader ?
A
An individual who sets up their own business
2
Q
Benefits of a sole trader:
A
- Easy to set up
- Get to keep all profits
3
Q
Drawbacks of a sole trader:
A
Unlimited liability: If the business goes bust your personal assets could be at risk
4
Q
What is a partnership ?
A
Where two or more people agree to run a business in partnership with each other
5
Q
Benefits of a partnership ?
A
- Share experience
- Share responsibility/ workload
6
Q
Drawbacks of a partnership
A
- Have to share profits
- Possible disputes with partner
- Unlimited liability
7
Q
What is limited liability
A
When a business goes bust the owners personal assets are not at risk
8
Q
What is unlimited liability
A
When a business goes bust the owners personal assets may be at risk
