Ownership styles

Question 1

Sole Trader

Answer 1

An Individual who owns and runs their own business. Sole traders have unlimited liability.

Question 2

Limited Liability

Answer 2

The owner is not responsible for the companies debts, they are only able to loose the money they have invested into the company in forms of shares.

Question 3

Unlimited Liability

Answer 3

This means that the manager is personally responsible for all debts run up by the business, therefore their home and all assets can be used to pay off the debts.

Question 4

Limited Company

Answer 4

The firm and owner are different legal entities therefore there finances are separate.

Question 5

Private Limited Companies

Answer 5

Have ltd after the name

Owned by shareholders who are known to the company. Shares can’t be sold on the stock exchange

Question 6

Public Limited Companies

Answer 6

Have Plc after the name

Shares can be sold on the stock exchange
- The shareholders have limited liability and are not
responsible for the companies finance