Types Of Businesses

Question 1

What is a limited company?

Answer 1

Type of business structure where the owners’ liability is limited to their investment in the company. Shareholders personal assets are protected from business debts (limited liability?

Question 2

What is an unincorporated business?

Answer 2

Type of business where the business and owner are considered the same legal entity and personal assets are not protected (unlimited liability).

Question 3

What are some advantages of a limited company?

Answer 3

Minimal personal liability, personal assets and company name are protected, easier access to capital.

Question 4

What are some disadvantages of a limited company?

Answer 4

More complex needing to register with companies house, costly to set up, public disclosure of financial information, withdrawing money from the company is more difficult.

Question 5

What is capital?

Answer 5

The money used to build, run or grow a business. Needed for function and growth of business.

Question 6

What is partnership?

Answer 6

Type of business structure where two or more individuals share ownership and management responsibilities.

Question 7

What are some advantages of a partnership?

Answer 7

Shared responsibilities, combined skills and resources.