- 6 Marks
Question
Kofi Stone, Ama Black and Adwoa Sika who were your students at the Ultimate Business School have decided to venture into business after their National Service which ends in the next three months. They have approached you for your advice on the type(s) of business(es) which they should invest in, considering the country’s economic environment.
Required:
Explain THREE (3) business types available to them. (6 marks)
Answer
Sole Proprietorship
This form of business is owned and operated by an individual, usually with assistance from family members. The owner raises the capital alone and enjoys all proceeds alone. In essence, he is the same as the business, bearing all risks and debts of the organization.
Partnership
A Partnership is a type of business which is owned and managed by two or more persons and who, like a sole proprietorship business, are not separate from the business. They contribute to the capital for the business and bear the risks and debts of the business collectively.
Limited Liability Company
A Limited Liability Company is one which has a separate legal personality from its owners who are usually referred to as shareholders. The owners cannot normally be held liable for the debts and liabilities of the business unless they have personally undertaken to do so.
- Tags: Business Types, Limited Liability Company, Partnership, Sole Proprietorship
- Level: Level 1
- Topic: The Business Organisation and its Stakeholders
- Series: NOV 2019
- Uploader: Olaoluwa