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- 6 Marks
Question
b) Identify TWO characteristics each of the following business set ups.
i) Sole proprietorship.
ii) Partnership.
iii) Limited companies.
(6 marks)
Answer
i) Sole Proprietorship:
- The organisation is owned and run by an individual who makes all business decisions.
- A trading name may be used, but there is no legal distinction between the individual and the business.
ii) Partnership:
- The business is owned and run by two or more individuals.
- A partnership name may be used, but the partnership is not a legal entity.
iii) Limited Companies:
- A limited company has a separate legal personality from its owners (shareholders).
- The shareholders cannot normally be sued for the debts of the business unless they have given some personal guarantee.
- Tags: Business Structures, Limited Companies, Partnership, Sole Proprietorship
- Level: Level 1
- Topic: Business and Organisational Structure
- Series: MAY 2017
- Uploader: Dotse