Sole Traders And Partnerships

Question 1

What is a reward for the risk that you’ve taken in starting your own business?

Answer 1

Personal success and satisfaction

Question 2

A purpose of identifying competition in a business plan is?

Answer 2

To help you with your price strategies

Question 3

What is not a benefit of being a sole trader?

Answer 3

Unlimited liability

Question 4

How many owners does a business which operates as a partnership have?

Answer 4

Has at least two owners

Question 5

What is most likely to describe the characteristics of a successful entrepreneur?

Answer 5

Determined and creative

Question 6

True or false?
Sole traders can benefit from continuity in their business

Answer 6

False

Question 7

Disadvantage of completing a business plan?

Answer 7

Time consuming

Question 8

Definition of business activity?

Answer 8

What the business does to provide its customers with a product or service

Question 9

Definition of enterprise?

Answer 9

Spotting an opportunity to provide a product or service that people are willing to buy

Question 10

What is the definition of an entrepreneur?

Answer 10

An individual who has the skills and knowledge to set up and run their own businesses and is willing to take the risks.

Question 11

Definition of capital?

Answer 11

Wealth in the form of money or assets.

Question 12

Definition of a sole trader?

Answer 12

A business that is owned or controlled by one person

Question 13

Definition of a business plan

Answer 13

The business plan sets out how the owners/managers of a business intend to achieve its objectives. Without a plan a business is likely to drift

Question 14

What are the main characteristics of a business plan

Answer 14

1.The business idea
2. The people running the business
3. Market research
4. Finance
5. The objectives of a business
6. The target market
7. Competitors

Question 15

What are the advantages of being a sole trader

Answer 15

A sole trader can be set up with little capital

A sole trader is in complete control of the business

All of the profits will go to the sole trader

All financial information is private

Question 16

What are the disadvantages of being a sole trader

Answer 16

Shortage of capital

Illness

High hours of work

Continuity

Shortage of skills

Unlimited liability

Question 17

What is the definition of unlimited liability

Answer 17

The owner of the business risks loosing his/hers personal possessions to pay off the debts of the business if it fails

Question 18

What is the definition of partnerships

Answer 18

A partnership is a business which is owned and controlled by a maximum of two partners

Question 19

What are advantages of partnerships

Answer 19

Partners may have different skills to offer

More capital can be raised to help the business operate or grow in size

Workload and ideas can be shared, and in the event of illness, the business should not experience a particular problem.

Financial information remains private to the partners

Question 20

What are disadvantages to partnerships

Answer 20

Profit has to be shared between the partners

There may be disagreements

Decision making may be slower

Partnerships with unlimited liability, put the personal possession of the partners at risk

There may be a shortage of capital because raising finances is often restricted to the existing partners

Question 21

What is the definition of limited partners/sleeping partners?

Answer 21

They invest money into the business, but do not take part in the day-to-day running of the business or any decision-making

Question 22

True or false

A deed of a partnership will state how much capital partners should contribute to a business

Answer 22

True

Question 23

True of false

A partnership has shareholders

Answer 23

False

Question 24

True of false

A sole trader can employ as many people as they wish

Answer 24

True

Question 25

True of false

Ordinary partners in a partnership and sole traders has unlimited liability

Answer 25

True