Which of the following is a benefit to an entrepreneur of having limited liability?
A - OCR - GCSE Business - Question 6 - 2019 - Paper 1
Question 6
Which of the following is a benefit to an entrepreneur of having limited liability?
A. All profits are tax free
B. Own possessions are not at risk
C. Productivity... show full transcript
Worked Solution & Example Answer:Which of the following is a benefit to an entrepreneur of having limited liability?
A - OCR - GCSE Business - Question 6 - 2019 - Paper 1
Step 1
Identify the benefits of limited liability
96%
114 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
Limited liability is a legal structure that protects the personal assets of the entrepreneur. It means that the owner's personal possessions cannot be taken to settle business debts.
Step 2
Evaluate each option
99%
104 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
A. All profits are tax free - This is incorrect, as profits are subject to taxation.
B. Own possessions are not at risk - This is correct, as limited liability protects personal assets.
C. Productivity will fall - This is incorrect; limited liability does not directly affect productivity.
D. Suppliers are more willing to supply - This may not be necessarily true as it depends on other factors.
Step 3
Conclusion
96%
101 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
The correct answer is B. Own possessions are not at risk.
