Limited liability (Edexcel GCSE Business): Quizzes
📚Quizzes
Practise the questions
12 questions from this quiz
ShowHide
Practise the questions
12 questions from this quiz
What does liability in business refer to?
What does liability in business refer to?
Legal obligation to pay company debts
Which type of business operates under unlimited liability?
Which type of business operates under unlimited liability?
Sole traders
In unlimited liability, what is the relationship between the owner and the business?
In unlimited liability, what is the relationship between the owner and the business?
They are the same legal entity
What can be seized to pay business debts under unlimited liability?
What can be seized to pay business debts under unlimited liability?
Personal assets like home, car, savings
A sole trader's business fails with £50k debt but £10k assets. What must the owner pay personally?
A sole trader's business fails with £50k debt but £10k assets. What must the owner pay personally?
£40,000
Which business type has limited liability?
Which business type has limited liability?
Private limited companies (Ltd)
What does 'separate legal entity' mean for limited companies?
What does 'separate legal entity' mean for limited companies?
Business is distinct from its owners
What is the maximum loss for owners of a limited company?
What is the maximum loss for owners of a limited company?
Their original investment only
How much control does a sole trader with unlimited liability have?
How much control does a sole trader with unlimited liability have?
Complete control (100%)
How are profits distributed in a limited company?
How are profits distributed in a limited company?
Among shareholders based on proportion
What must limited liability companies do with their accounts?
What must limited liability companies do with their accounts?
File them with Companies House
How does limited liability reduce risk compared to unlimited liability?
How does limited liability reduce risk compared to unlimited liability?
It caps losses at the investment amount