Sole trader, partnership, LLC
Edexcel GCSE Business Studies revision on Sole trader, partnership, LLC. Aligned to the Pearson Edexcel GCSE Business 1BS0 specification. This bank has 6 practice questions on this topic.
Sample questions (3 of 6)
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Question 1
Which of the following is a legal characteristic of a sole trader?
- A) Unlimited liability
- B) Separate legal entity
- C) Limited liability
- D) Shared ownership
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Answer: Unlimited liability
Unlimited liability means that there is no distinction between the business and the owner in the eyes of the law. If the business fails, the owner's personal assets can be seized to pay off business debts.
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Question 2
What is the term for a legal document that sets out the rights and responsibilities of partners in a partnership?
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Answer: Deed of partnership
A deed of partnership is an optional but highly recommended document. It outlines how profits are shared, how decisions are made, and what happens if a partner leaves the business.
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Question 3
Which business structure requires the owner to register with Companies House?
- A) Sole trader
- B) Partnership
- C) Private Limited Company
- D) Franchise
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Answer: Private Limited Company
Incorporation is the process of creating a separate legal entity. Unlike sole traders or partnerships, a Limited Company must formally register its details with the government registrar, Companies House, to exist legally.
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