1.4.1 Start-up and small business options

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What is the concept of limited liability in business?: Business owners are not personally liable for the business's debts
What does unlimited liability imply for a business owner?: Personal liability for business debts
What are the ownership options available for start-up businesses?: Sole trader
Partnership
Private limited company
How does the choice of business ownership affect the ability to raise finance?: It influences the sources and ease of obtaining funding
What is a sole trader?: A business owned and controlled by one person
Which business ownership type typically involves shared ownership and operation by two or more individuals?: Partnership
What is a private limited company?: A business owned by shareholders with limited liability
How does owning a franchise work?: Buying the rights to use an existing business model
Who is the franchisor?: The company that owns the brand and business model
What liability do sole traders face?: Unlimited liability
What kind of liability is generally associated with a partnership?: Unlimited liability
What protection does limited liability offer in a private limited company?: Protection of personal assets from business debts
Why might a business choose to start as a private limited company?: To have limited liability protection
What advantage does a franchise offer compared to an independent business?: Operating under an established brand with support
What disadvantage might a franchisee face compared to an independent business owner?: Less control over business operations and decisions
What does 'raising finance' typically refer to?: Obtaining funds to start or expand the business

1.4.1 Start-up and small business options

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