Questions and Answers
Which type of business is owned and operated by members who pool their resources for mutual benefit?
Cooperatives
Which business type has a single owner who makes all decisions and takes all profits?
Sole Trader
In which type of business are the risks shared among 2-20 individuals?
Partnership
Which type of partner has limited personal liability in a partnership?
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What is a common example of a sole trader business?
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A sole trader has limited personal liability.
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Partnerships can have up to 50 individuals involved.
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Cooperatives are solely focused on financial services.
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In a partnership, all partners are equally involved in decision-making.
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Sole traders typically have more limited capital compared to partnerships.
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Study Notes
Business Ownership
- A sole trader is a single business owner who makes all decisions and takes all profits.
- Sole traders have limited capital and personal liability, meaning their personal assets are at risk in case of business failure.
- Examples of sole traders include electricians, gardeners, and plumbers.
Partnership
- A partnership is a business formed by 2-20 individuals who share capital, workload, and risks.
- There are three types of partners in a partnership: general partners, sleeping partners, and limited liability partners.
- Each partner has a role in decision-making and profit-sharing.
Cooperatives
- A cooperative is a business owned and operated by its members who pool resources for mutual benefit.
- There are five types of cooperatives: consumer, producer, financial, services, and workers cooperatives.
- Cooperatives aim to provide benefits to their members, such as better prices, improved services, or enhanced working conditions.
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