Legal Structure - Nature of Business

Question 1

What is an advantage of a limited liability company:

Accepted Answer

Easier to attract public finance, Greater spread of risk

Question 2

Which of the following are examples of public companies?

Accepted Answer

JB Hi Fi, Billabong, NAB

Question 3

What is an advantage to a sole trader business

Accepted Answer

Less government regulation, Low cost of entry

Question 4

The most common legal structure is

Accepted Answer

Sole trader

Question 5

A disadvantage of a partnership:

Accepted Answer

Divided loyalty and authority

Question 6

Incorporation means that the owners and the company are still one legal entity

Accepted Answer

False

Question 7

Shares for public companies are listed on ASX and the public can buy/sell shares

Accepted Answer

True

Question 8

A disadvantage of a franchise:

Accepted Answer

Disagreements over terms of contract, Individuality difficult

Question 9

Incorporated -process companies go through to become a separate legal entity from the owners

Accepted Answer

True

Question 10

Only 2 - 20 people can be involved in a partnership structure.

Accepted Answer

False

Questions 10