Business Ownership and Finance

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What is a characteristic of a sole proprietorship that can lead to continuity problems?

The risk of financial loss being borne by the owner
The sole proprietor's ability to make all management decisions
The need to consider other opinions in management decisions
The owner's retirement or long-term illness (correct)

Which of the following is a benefit of a sole proprietorship in terms of finance?

Shared risk with other partners
Access to external financial sources
No financial requirements to start the business (correct)
Limited liability for the owner

What is the primary source of financial funds for a sole proprietorship?

The sole proprietor's personal financial capabilities (correct)
Revenue generated from the business
Borrowings from financial institutions
Investments from external partners

What is a characteristic of a sole proprietorship in terms of management decision-making?

The sole proprietor makes all management decisions (C) Signup and view all the answers

What is a financial risk associated with a sole proprietorship?

The owner is personally responsible for business debts (B) Signup and view all the answers

What is a characteristic of a sole proprietorship in terms of taxation?

The owner reports business profits on their personal income tax statement (A) Signup and view all the answers

Which type of business ownership allows for more than one owner?

Partnership (C) Signup and view all the answers

What is the primary difference between owner(s) and manager(s) in unincorporated businesses?

Owners and managers are the same person(s) (C) Signup and view all the answers

What is the primary source of finance for a corporation?

Share capital (D) Signup and view all the answers

What is a key consideration for a business when choosing a source of finance?

The business's current financial situation (A) Signup and view all the answers

What is a type of short-term credit?

Bank overdraft (B) Signup and view all the answers

What document reveals the sources of finance that a business has used?

Balance sheet (A) Signup and view all the answers

What is a crucial factor in determining who is liable for the debts and obligations of a business?

The legal structure of the business (B) Signup and view all the answers

Who might be interested in knowing the legal structure of a business?

Both customers and investors of the business (A) Signup and view all the answers

What is a key consideration for founders and owners of a company?

The legal structure and implications for liability (D) Signup and view all the answers

Who may own a business?

Either individuals or other businesses (D) Signup and view all the answers

What is a key difference between various types of business ownership?

The level of liability for the owners (A) Signup and view all the answers

What is a crucial consideration when raising financial resources for a business?

The business's legal structure (A) Signup and view all the answers