There are 11 questions, take all the time you need to answer them, but it would be better to take around 20 minutes overall, as in an actual economics exam, you won’t be recieving ALL the time you need.
Let’s Begin!

1) What is unlimited liability?

2) What is limited liability?

3) What is the deed of a partnership?

4) Why would 2 partners want a deed of a partnership?

5) Give 3 advantages of a sole-trader

6) How many people can there be in a partnership?

7) 

• Give 3 disadvantages of a partnership
• Give 3 advantages of a partnership?

8) What is a sleeping partner?
We have not been through this yet, Clue: Has something to do with ‘Partnership Business’

9) Why do sole-traders find it difficult to raise capital?

10) Give a difference between partnerships and sole-traders

11) Why did the chicken cross the road? <— Tricky question ;)

Next up: Answers will arrive shortly ;) Let’s see how how many points you have scored!

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The main points you need to know about Partnerships is quite few, and simple,
the key figures are:

• 2~20 partners- 2~20 people run the business together
• Partners own the company
• Partners are responsible for the debts (unlimited liability) Where business and personal posessions are linked together, so when one thing goes wrong, business and personal posessions will become ‘messed up’.
• Partners make decisions- and are responsible for the decisions made, as they work together.
• Lack Of Capital

Advantages of Partnerships:

• Partners can bring new skills and ideas to improve the business

Disadvantages of Partnerships:

• Partners may have disagreements and negotiation problems
• Partners have un-limited liability
• Partners lack capital

Information of Partnerships is straight-forward and easy
So next we will be moving onto a Quiz, don’t worry, the quiz is based on what you have just learnt, and maybe a little extra questions which may include a little thinking. Be Prepared (:

The moment you’ve all been waiting for…

Sole Trader is the most common form of business organization. It is a business owned and operated by just one person- although the sole trader can employ others,
the owner is the SoLe PrOpRiEtOr.
One if the reasons why ‘Sole Traders’ is such a common for of organization is because there are so few legal requirement to set it up.

The only legal regulations which must be followed are that:

• Owner must with, and send annual accounts to the government TAX office.
• In some industries, the sole trader must observe certain laws which applies to all firms in that industry.
  Including health and safety laws and obtaining a license,
  e.g.: To sell alcohol or operate a taxi.

Advantages of a Sole Trader:

• Control-being able to run the business without interference.
• Profit retention- Sole Traders retain all the profits of their business.
• Private data- Information of sole trader is kept secret/private, unlike that of limited companies which is necessarily made public after registration with companies house.
• Specialist- Ofter a small business, sole traders can offter a more personal service with local roots and ties.
  This can be more appealing to potential customers in the local company.

Disadvantages of a Sole Trader:

• Decision making- All decision is made by only the sole-trader, no room for help from others, so the success or failure of the business rests on the sole-trader themselves.
• Liability- Sole Tradersare not seen as a seperate entity by the law. Therefore, there are subjects to unlimited liability.
  Meaning, if business gets into debt, the business is liable.
  In worse case, a person may risk their home, personal savings and other properties both in & outside of the business.
• Finance- Sole Traders usually struggle to raise finance to their business, as making decisions alone, they may struggle with expansion in future
• Reverse Economies Of Scale- Sole Traders are unable to take advantage of economies of scale in the same way as limited companies and larger corporations, who can afford to buy large amounts.
  Meaning, they have to charge highter prices for their products or services in order to cover the costs.

Next up:

• Fun example of a sole-trader teehee!
• Partnerships
• Quiz: Partnerships and Sole-trader  <— This may come alittle after