Types of Business Ownership Structures

What is the main difference between General Partners and Limited Partners in a partnership?

General Partners contribute capital and expertise, while Limited Partners only contribute capital.

What are the characteristics of a Sole Trader (Proprietorship) business?

Owned and controlled by an individual, easy to start and wind up, and has unlimited liability.

What are the advantages of a Sole Trader (Proprietorship) business?

Easy to start, profits are not shared, self-management, controlled by the owner, and few government regulations.

Define a Business Organization.

A group of people working together to satisfy human needs and wants by producing goods and services with a common objective of profit maximization. Signup and view all the answers

What is the main difference between a General Partnership and a Limited Partnership?

In a General Partnership, all partners have unlimited liability and can manage the partnership. In a Limited Partnership, there are both general partners and limited partners, with limited partners having limited liability and no management control. Signup and view all the answers

What are the advantages of incorporating a company under the Companies Act 2007?

Separate legal personality, sharing risk, no partners arrangement, easy formation, flexibility, large resources, no legal personality, combination of different skills. Signup and view all the answers

What are the disadvantages of forming a partnership?

Unlimited liability, risk of disagreement, lack of continuity if partners join or leave, necessity to value all partnership assets, need for a formal agreement. Signup and view all the answers

What is the difference between a private limited company and a public limited company?

Private limited companies have a maximum of 50 shareholders and must have at least one director, while public limited companies have no limit on shareholders and must have at least two directors. Signup and view all the answers

What is the significance of the name for a public limited company?

The name must end with 'public limited company' or 'PLC'; if not, it should include 'limited' or 'LTD' and must be easily readable. Signup and view all the answers

What are some key responsibilities of partners in a partnership?

Deciding on profit and loss sharing, determining investment amounts, defining management responsibilities. Signup and view all the answers

How does incorporating a company help in risk management?

Incorporation allows for the separation of ownership and management, leading to shared responsibility and risk management. Signup and view all the answers