SOLE PROPRIETORS AND PARTNERSHIPS

Question 1

Unincorporated

Answer 1

A form of business organisation which has unlimited liability.

Question 2

Sole Proprietor

Answer 2

Unincorporated businesses owned by one person. AKA a Sole trader.

Question 3

Partnership

Answer 3

A form of unincorporated business organisation which is owned by more than one person.

Question 4

Unlimited Liability

Answer 4

Owners of the business are responsible for all of the debts,

Question 5

Start up capital

Answer 5

Money needed to start up a new business. It is usually provided by the owner of the business.

Question 6

Economies of large scale production

Answer 6

These occur when the scale of business activity increases, resulting in a reduction in the average costs of production.

Question 7

Silent or sleeping partner

Answer 7

A person who has invested capital into a business but who does not take an active part in the running of it.

Question 8

Deed of partnership

Answer 8

A legal agreement drawn up between the partners - for instance, how profits and losses are to be shared; how the business is to operate.

Question 9

LLP

Answer 9

A limited liability partnership. This is a new form of business organisation which trades as a partnership but with limited liability.