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SET Types of Business

The document discusses different types of business organizations and their key characteristics. It addresses topics like sole proprietorships, partnerships, limited liability companies, and corporations. Some key points covered include: partnerships involve unlimited liability for partners; limited companies provide limited liability for shareholders; and sole proprietorships do not separate the owner and business legally. The document is in a multiple choice question format to test understanding of different business structures.

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Rabia Bhatti
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30 views5 pages

SET Types of Business

The document discusses different types of business organizations and their key characteristics. It addresses topics like sole proprietorships, partnerships, limited liability companies, and corporations. Some key points covered include: partnerships involve unlimited liability for partners; limited companies provide limited liability for shareholders; and sole proprietorships do not separate the owner and business legally. The document is in a multiple choice question format to test understanding of different business structures.

Uploaded by

Rabia Bhatti
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Types of businesses

1. The Maximum number of banking partners can be fixed at the following?


(a) 10

(b) 20

(c) 50

(d) No Limit
2. Which of the following is a benefit of the corporate form of business?
(a) Rising large amount of capital is easier

(b) Ownership is easily transferrable

(c) Limited liability of the shareholders/stockholders

(d) All of the above


3. Company with single taxation is called?
(a) S-Type

(b) LLP (LIMITED LIABILITY PARTNERSHIP)

(c) Joint Stock Company

(d) PC
4. Which of the following enjoys the benefit of limited liability?
(a) Limited Liability company

(b) Sole-proprietorship

(c) Foundation

(d) Trust
5. A large organization with separate legal status is known as?
(a) Sole proprietorship

(b) Partnership
(c) Joint stock company

(d) None
6. Which of these characteristics does not apply to partnership?
(a) Unlimited liabilities

(b) Unlimited life

(c) Mutual agency

(d) Single taxation


7. Organizations which combine the limited liability advantage of a partnership are
called as?
(a) S Type

(b) PC

(c) LLP

(d) None
8. All of the form of business organizations except?
(a) Partnership

(b) Unlimited Liabilities Companies

(c) LLP

(d) S type
9. Which of the following business has the burden of unlimited liability?
(a) Sole-proprietorship

(b) Single member company

(c) Public limited company

(d) Private limited company


10. Which of the following business entity is collectively known as firm?
(a) Sole trader-ship

(b) Partnership

(c) Co-operative society

(d) Company
 
11. Organizations which combine the limited liability advantage in sole ownership
are called?
(a) S Type

(b) Hybrid

(c) PC

(d) LLP
12. The partnership format might be useful to the owners of a small business in
order to?
(a) Share risks

(b) Gain limited liability

(c) Reduce taxable income

(d) All of Above


13. Which of the following is true about a partnership?
(a) All partners have invested an equal amount of capital

(b) A partnership requires at least three people

(c) Partnerships do not get favorable tax treatment compared to joint stock company (JSC)

(d) All partners are personally liable for the debts of the business
14. What is the meaning of the word ‘limited’ in the name of a limited company?
(a) The number of shareholders is limited to 50

(b) The liability of the company for its own debts is limited
(c) The liability of shareholders for the company’s debts is limited

(d) There is a limit on the amount of debts that the company can contract
15. A _______________ business is one in which income is generated by the resale
of produced product?
(a) Manufacturing

(b) Merchandising

(c) Sole Proprietorship

(d) Partnership
16. Which of the following is/are true about the sole trader form of business?
(a) A sole trader is liable to pay income tax on his/her earnings

(b) Sole traders must register the name of their business with the registrar of companies

(c) Sole traders do not need to consult accountants

(d) All of the given options


17. Which of the following documents contains offer to subscribe shares?
(a) Memorandum of Association

(b) Articles of Association

(c) Prospectus

(d) Statutory Declaration


18. Which of the following are the owners of a partnership business?
(a) Proprietors

(b) Partners

(c) Shareholders

(d) Managers
19. In which type of a business, the owner and his business are not considered same
in the eyes of law?
(a) Sole proprietorship

(b) Limited companies

(c) Partnership

(d) a and c
20. Which of the following forms of business does not protect owners from business
creditors?
(a) Partnership

(b) Sole proprietorship

(c) Limited liability company

(d) Both a and b

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