1) Choose the definition that best describes a Sole Trader. a) A business that cannot have employees b) A business owned by one person c) A business where shareholders are powerful d) A business that has between 2-20 owners 2) If a sole trader makes a loss, who is legally responsible to pay for the debt? a) Employees b) The business owner c) Shareholders d) Suppliers 3) A sole trader can: a) only employ one person b) employ as many people as the owner wishes c) only employ workers where other workers agree d) not employ any workers because it is a sole trader working on their own. 4) Joe, Fin and Sam are accountants. They are considering setting up a partnership. Which of the following statements is NOT an advantage of being a partnership? Select all that apply. a) The profits are shared between partners b) More owners means more capital c) More owners means more ideas and skills 5) Steven Jones runs his own plumbing business as a sole trader. He has done this for a number of years and understands that one of the key disadvantages is unlimited liability. Which of the following statements accurately analyses the impact of unlimited liability on a sole trader? a) The shareholders in Steven's business are responsible for all of the debts of the business, and could lose personal possessions to pay back debt b) Steven is totally responsible for the debts of the business, and may need to sell personal possessions in order to pay these debts c) Steven's liability is limited to the money that he invested into the business. This means he can't lose any of his personal possessions 6) Which one of the following is a characteristic shared by sole traders and partnerships? a) There are disagreements between owners b) Owners can specialise in different areas of the business c) There is a lack of continuity if an owner dies d) The owner gets to keep 100% of the profits 7) A partnership has: a) a maximum of 20 partners b) a maximum of 2 partners c) a minimum of 2 partners d) a minimum of 20 partners.

1.3 Sole Traders & Partnerships Quiz

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