1.5.4 Forms Of Business

Question 1

Liability

Answer 1

Refers to the legal responsibility of a business towards their debts

Question 2

Unlimited liability

Limited liability

Answer 2

The owner and the business are the same entity

The business and owner are separate

Question 3

Sole trader

Answer 3

A sole trader owns and runs their own business

✅ keeps all their profit
✅ Owner has complete control
✅ Quick/ easy to set up

❌ Won’t benefit from economies of scale
❌Likely to work long hours
❌Unlimited liability

Question 4

Partnership