Topic 5 Types of customers and their needs

Question 1

1. Explain the key differences between a partnership and a limited liability partnership.

Answer 1

 A partnership is an agreement between two or more self-employed people to work together. The partnership itself does not exist as a legal entity (or being). A limited liability partnership is a separate legal entity and exists in its own right.
 A partnership does not have the right to borrow in its own right; each partner will have to borrow on a personal basis for the business. An LLP is able to borrow in its own right.
 Partners are responsible for the debts on a joint and several basis, which means that each partner can be held accountable for all the debts. Partners in an LLP do not have liability for any of the LLP’s debts, over and above any capital they have put in or guarantees they have given.

Question 2

2. Bob bought shares in Wonder Ltd two years ago but the firm has recently been declared insolvent with debts of £3m. What is Bob’s liability for the company’s debts?

Answer 2

Bob would have no liability for the company’s debts.

Question 3

3. Which demographic group tends to be the UK’s main inheritors?

Answer 3

People in their 50s tend to be the biggest inheritors.

Question 4

4. After ensuring current arrangements are appropriate for existing needs, what is the next priority in the hierarchy of financial needs?

Answer 4

The next priority would be protection against the financial consequences of death or serious illness.