CH6: Benefits of a company over other forms of ownerships (V)

Question 1

Provide the definition of a MOI.

Answer 1

Document sets out rights, responsibilities and duties of shareholders and directors.

Question 2

Provide the definition of a Prospectus.

Answer 2

Document inviting public to buy securities or shares.

Question 3

Name the 8 forms of ownership.

Answer 3

• Sole Proprietorship
• Partnership
• Public company
• Private company
• Personal liability company
• Non-profit company
• Co-operative

Question 4

Give 4 characteristics of a Sole Proprietorship.

Answer 4

• No legal requirements for name
• Unlimited liability
• Limited continuity
• 1 owner

Question 5

Give 4 advantages of a Sole Trader.

Answer 5

• Quick decision-making
• Profit to owner
• Assets belong to owner
• Easily adapt to changing needs of consumers.

Question 6

Give 4 disadvantages of a Sole Trader.

Answer 6

• Unlimited liability
• Limited continuity
• Cash flow problems
• Growth hampered due to lack of capital.