Unit 4- Types Of Business Originations

Question 1

What is a private limited company?

Answer 1

Companies that are small to medium sized that is owned by shareholders who are often family members, friends and relatives

Question 2

Advantages of a private limited company

Answer 2

(Limited Liability)

If the company experiences financial distress the personal assets of the shareholders will not be at risk.

(Continuity of Existence)

Business will be not be affected by the status of the owner.

Question 3

Disadvantages of a public limited company

Answer 3

(Growth)

Growth mat be limited because maximum shareholders are fifty.

(Shares)

The shares in a plc cannot be sold or transferred to anyone without the agreements.

Question 4

What is a sole trader?

Answer 4

It is a business owned and operated by one person

Question 5

Advantages of a sole trader

Answer 5

(Profits)

As a sole trader you keep all the profits

(Starting the business)

Establishing and operating your business is simple.

Question 6

Disadvantages of a sole trader

Answer 6

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