1.2 Business ownership

• In a sole proprietorship, the owner has unlimited liability
• The key differences between types of business ownership include liability and complexity of setup
• What is the primary disadvantage of being a sole trader?

  Unlimited liability
• Shareholders in a private limited company have limited liability.


  True
• Limited liability in a private limited company means shareholders are not personally responsible for the company's debts
• Unlimited liability means the owner is personally responsible for all debts and losses of the business.

  True
• The key advantages of being a sole trader include simplicity, full control, and direct access to profits.


  True
• What type of liability do partners in a partnership face?

  Unlimited liability
• Partnerships allow business owners to combine skills, experience, and capital.


  True
• Private limited companies provide limited liability but are less flexible than sole proprietorships.


  True
• Shareholders in a public limited company have limited liability
• Order the business ownership structures from least to most complex to set up.

  1️⃣ Sole Proprietorship

  2️⃣ Partnership

  3️⃣ Private Limited Company (Ltd)

  4️⃣ Public Limited Company (Plc)
• What is a sole proprietorship?

  Owned by a single individual
• What is a private limited company (Ltd)?

  Owned by shareholders, no public trading
• Order the following types of business ownership from least to most complex to set up:

  1️⃣ Sole trader

  2️⃣ Partnership

  3️⃣ Private limited company (Ltd)

  4️⃣ Public limited company (Plc)
• In a partnership, partners share responsibility but also have unlimited liability
• Which business structures have unlimited liability for the owners?

  Sole proprietorships and partnerships
• Sole traders have limited access to finance
• In a partnership, partners share workload and decision-making under shared responsibility
• Shareholders in a private limited company have limited liability
• Choosing the right business structure involves considering factors such as liability, capital needs, and privacy.


  True
• Partners in a partnership share profits and losses.


  True
• Which types of business ownership have unlimited liability?

  Sole proprietorship and partnership
• Sole traders face workload and stress due to handling all aspects of the business.


  True
• What is one major disadvantage of a partnership?

  Unlimited liability
• What is one advantage of a private limited company?

  Limited liability
• What type of liability do sole traders face?

  Unlimited liability
• What legal requirement makes private limited companies more complex to set up?

  More legal and administrative requirements
• What is a key advantage of a public limited company (Plc)?

  Large capital raising potential