Exploring Business - Unit 1

• What is a partnership?

  A partnership is a business owned by 2 or more partners.
• How are profits shared in a partnership?

  Each partner has an equal share of profits.
• What is a common example of a partnership?

  Doctor surgeries are a common example of partnerships.
• What are the advantages of partnerships?

  • More experience and ideas from multiple partners
  • Easier to raise money from banks
  • Good employees can become partners, aiding retention
• What are the disadvantages of partnerships?

  • Profits are shared, potentially lowering individual earnings
  • Unlimited liability for partners
  • Potential for disagreements among partners
  • Each partner is liable for the actions of others
• What is a limited company?

  A limited company is a business owned by shareholders.
• What are the two types of limited companies?

  The two types of limited companies are public and private.
• What does limited liability mean for shareholders?

  Shareholders are only legally responsible up to the amount they’ve invested.
• If a shareholder invests £10,000 in a limited company, what is the maximum they can lose?

  £10,000 is the maximum they can lose.
• Who owns a limited liability company?

  Limited liability companies are owned by shareholders.
• How does ownership of shares affect control in a limited company?

  The more shares a person owns, the more control they have relative to other shareholders.
• What does it mean for a limited company to be incorporated?

  A limited company has a separate legal identity from its owners.
• What happens to cash, property, and debt in a limited company?

  They are in the company’s name and are the responsibility of the company.