Types of business ✔️

Question 1

Sole trader

Answer 1

• A person that operates or runs a business individually, they can have employees.
• they have unlimited liability

Question 2

Partnership

Answer 2

• A business owned by two or more individuals who share profits and losses.
• Unlimited liability

Question 3

Limited liability partnership

Answer 3

A business structure in which partners have limited personal liability for the debts of the company.

Question 4

Private limited company

Answer 4

• A business in which the ownership is limited to a small number of individuals and the company’s shares are not publicly traded.
• limited liability

Question 5

Public limited company

Answer 5

• A business in which the ownership is divided into shares that are publicly traded on a stock exchange.
• limited liability

Question 6

Limited liability

Answer 6

Limitation of personal financial responsibility for a business’ debts and obligations.

Question 7

Unlimited liability

Answer 7

a situation where a person (typically a business owner or senior executive) is personally responsible for all debts and obligations of the company, regardless of the amount.

Question 8

Factors affecting the choice of legal structure of a business

Answer 8

• liability protection
• taxation
• Ownership/management structure
• capitalisation
• regulatory environment
  -future plans of the business