1.4.1 The options for start-up and small businesses

• A small business is independently owned and operated, with a relatively small number of employees and relatively low volume of sales
• Partnerships provide more capital and shared responsibilities compared to sole traders.


  True
• The choice of business structure depends on factors like the amount of capital needed and the level of risk the owners are willing to take
• A limited company offers limited liability but has higher compliance costs
• The primary focus of startups is rapid, scalable growth, while small businesses focus on serving a local market.

  True
• Order the factors affecting the choice of business structure by their relevance to capital needs:

  1️⃣ Capital Needs

  2️⃣ Risk Tolerance

  3️⃣ Desired Control/Ownership
• Startups focus on rapid, scalable growth, while small businesses are more focused on serving a local market.


  True
• In a sole trader structure, the owner has unlimited liability
• Match the business structure with its advantage:

  Sole Trader ↔️ Simple and inexpensive to set up

  Partnership ↔️ More capital available from partners

  Limited Company ↔️ Limited liability for owners
• A partnership allows for shared responsibilities but carries unlimited liability
• Startups are often funded by venture capital or angel investors
• A sole trader's unlimited personal liability is a significant disadvantage
• Limited companies incur higher compliance costs due to more stringent regulations
• A startup is a new business venture, typically a technology-based company, that aims to solve a problem
• Startups and small businesses both prioritize solving problems and growing locally.

  False
• A limited company offers limited liability but has higher compliance costs
• A sole trader is inexpensive to set up, but has unlimited personal liability
• Match the business structure with its key characteristics:

  Sole Trader ↔️ Unlimited liability, one owner

  Partnership ↔️ Unlimited liability, shared workload

  Limited Company ↔️ Limited liability, separate legal entity
• Unlimited liability is a characteristic of both sole traders and partnerships.


  True