Podcast
Questions and Answers
In a sole proprietorship, the owner is personally responsible for all business debts.
In a sole proprietorship, the owner is personally responsible for all business debts.
True
Which business structure offers limited liability for its owners?
Which business structure offers limited liability for its owners?
What is the main advantage of a franchise over starting a completely independent business?
What is the main advantage of a franchise over starting a completely independent business?
An established brand and business model, along with support from the franchisor.
In a ______ partnership, some partners are only investors and have limited liability.
In a ______ partnership, some partners are only investors and have limited liability.
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Match the following business structures with their key characteristics:
Match the following business structures with their key characteristics:
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Study Notes
Sole Proprietorship
- Owned and run by one person.
- Unlimited liability; owner is responsible for debts.
- Simple to set up and manage.
- Harder to raise capital.
Partnership
- Two or more people share ownership.
- Profits and losses are typically shared.
- Types: General (all partners manage), Limited (some partners are investors).
- Advantages: Shared responsibility, more capital.
- Disadvantages: Unlimited liability (except in limited partnerships).
Corporation
- Legal entity separate from owners (shareholders).
- Limited liability for shareholders.
- More complex structure, requires board meetings and formalities.
- Can raise large amounts of capital through share issuance.
Franchise
- Business model where a franchisee pays for rights to operate using a franchisor's brand, products, and model.
- Advantages: Established brand, support, lower risk.
- Disadvantages: High initial cost, less control.
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Description
This quiz covers the key aspects of four main business structures: Sole Proprietorship, Partnership, Corporation, and Franchise. Test your understanding of their characteristics, advantages, and disadvantages. Perfect for anyone interested in entrepreneurship or business management.
