Topic 1.4 - Making the start-up effective

Question 1

Sole trader

Answer 1

The owner of a business which has unlimited liability

Question 2

Unlimited liabiliy

Answer 2

A legal obligation on the owner of a business to settle off debts of the business. In law there is no distinction between what the business owns and owes and what the owner owes and owns

Question 3

Limited liability

Answer 3

When shareholders of a company are not personally liable for the debts of the company: the most they can lose is the value of the shares off the company

Question 4

Companies

Answer 4

Businesses whose shareholders have limited liability

Question 5

VAT

Answer 5

A tax on the values of sales

Question 6

Income tax

Answer 6

A tax on the income earned by workers: this includes sole traders who have to pay income tax on their net earnings

Question 7

National insurance contributions

Answer 7

A tax on the earnings of workers

Question 8

Corporation tax

Answer 8

A tax on the profit of limited companies