Types of Businesses

Question 1

Sole Trader

Answer 1

An individual who owns and runs the business, and is completely responsible for it.

Question 2

Partnership

Answer 2

A number of individuals working together in business and sharing the profit (or losses)

Question 3

LLPs and Limited Partnerships

Answer 3

A number of individuals working together in partnership which has been incorporated as a separate legal entity.

Question 4

Separate Legal Entity

Answer 4

This means the partner can limit their personal liability for the debts of the business.

Question 5

Private Limited Company

Answer 5

An incorporated business with its own legal entity, which is owned by shareholders and run by directors.

Question 6

Public Limited Company

Answer 6

An incorporated business with its own legal entity, which is owned by shareholders and run by directors.

Question 7

What makes a Private Limited Company and Public Limited Company different?

Answer 7

The shares of a private limited company ARE NOT traded on a stock exchange.

The shares of a public limited company ARE traded on a stock exchange.

Question 8

Not For Profit Organisation

Answer 8

Charities and Public Sector Organisations. They use the money received to achieve the organisation’s objectives.