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True or False quiz

 Reading task

Unit 1.2 - True or False quiz

 

To test your understanding of this topic (Types of business entities), answer the following true or false questions.

No.StatementTrue or False?
1.The group with overall responsibility for the day-to-day running of a limited liability company is known as the Board of Directors.

True

2.A common feature of the commercial (for-profit) businesses is the aim to generate profit.

True

3.Social enterprises, including cooperatives and non-governmental organizations, operate in the public sector of the economy.

False - they operate in the private sector

4.Sole traders do not have to work alone and can employ as many employees as needed.

True

5.Unlimited liability is an advantage of being a sole trader.

False

6.Businesses owned and run by the government operated in the public sector.

True

7.Partnerships provide the opportunity for all owners to have limited liability.

False

8.The provision of goods and services that are not provided by private businesses is a major objective of the public sector.

True

9.Having limited liability means that owners of a business can only lose the money they have invested, and no more.

True

10.A business that is owned and operated by one person is known as a sole trader.

True

11.Business organizations that are run and owned jointly by their members are known as co-operatives.

True

12.The legal agreement that sets out the rules of how a partnership will operate is known as a memorandum of association.

False - it is called a deed of partnership

13.A drawback of being a sole trader is that the workload for the owner can be extremely high.

True

14.An unincorporated business is a separate legal entity from its owner(s).

False

15.Shareholders are joint owners of a publicly held company.

True

16.Privately held companies are owned by stakeholders.

False - they are owned by shareholders

17.The first time the shares of a public limited company are offered for sale on a stock exchange is called an Initial Public Offering (IPO).

True

18.A sole trader is unlikely to be able to exploit economies of scale.

True

19.Silent partners provide additional capital to a business without having any direct role in the running of the business.

True

20.The shares of privately held companies can be advertised for sale and sold via a stock exchange.

False - this applies to publicly held companies

Return to the Unit 1.2 - Types of business entities homepage

Return to the Unit 1 - Introduction to Business Management homepage

 


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