Business Structures

Question 1

What are two advantages of a company?

Answer 1

Your personal assets are not at risk

Easier to get funding

Question 2

A partnership

Answer 2

You can share expertise with each other.

Oartners can share the risk and responsibility of the company if they get sick or decide to go on holiday

Question 3

A Sole Trader

Answer 3

You can chose you hours and do what you think fit with company.
You recieve all of the profit.

Question 4

What is the definition of unlimited liability?

Answer 4

If a business fails the personal assets of the owner can be used to pay business debts.

Question 5

What is the definition of limited liability?

Answer 5

If a business fails the personal assets of the owner can’t be used to pay business debts.

Question 6

What are 2 disadvantages to a company?

Answer 6

You do not get to do what you want with the company.

Directors need to clearly understand their responsibilities so they don’t end up losing personal assets.

Question 7

A partnership?

Answer 7

If one person is not carrying their load then they may still get payed the same for doing less or bring in less profit
If one partner dies or wants to leave the partnership then there is nothing you can do.

Question 8

A Sole Trader?

Answer 8

If you get sick then the business may fail slightly.