Business Organisations
& Governance –
Practice 2026-
VERSION WITH BEST
QUESTIONS AND
VERRIFIED ANSWERS
100% CORRECT WITH
RATIONELS.
,1. Which form of business organisation
has unlimited liability?
A. Company
B. Cooperative
C. Sole proprietorship
D. Public corporation
Answer: C
Rationale: In a sole proprietorship, the
owner is personally responsible for all
business debts.
2. A partnership is best described as:
A. A legally separate entity from owners
B. A voluntary association of two or
more persons carrying business for profit
C. A government-owned business
,D. A non-profit organisation
Answer: B
Rationale: Partnerships involve two or
more individuals sharing profits and
responsibilities.
3. The main advantage of a limited
liability company is:
A. No taxation
B. Owners have unlimited liability
C. Shareholders' liability is limited to
their investment
D. No legal identity
Answer: C
Rationale: Shareholders are only liable
up to the value of their shares.
, 4. Which document governs internal
management of a company?
A. Memorandum of Association
B. Articles of Association
C. Certificate of Incorporation
D. Prospectus
Answer: B
Rationale: Articles of Association set
rules for internal operations.
5. The process of forming a company is
called:
A. Liquidation
B. Incorporation
& Governance –
Practice 2026-
VERSION WITH BEST
QUESTIONS AND
VERRIFIED ANSWERS
100% CORRECT WITH
RATIONELS.
,1. Which form of business organisation
has unlimited liability?
A. Company
B. Cooperative
C. Sole proprietorship
D. Public corporation
Answer: C
Rationale: In a sole proprietorship, the
owner is personally responsible for all
business debts.
2. A partnership is best described as:
A. A legally separate entity from owners
B. A voluntary association of two or
more persons carrying business for profit
C. A government-owned business
,D. A non-profit organisation
Answer: B
Rationale: Partnerships involve two or
more individuals sharing profits and
responsibilities.
3. The main advantage of a limited
liability company is:
A. No taxation
B. Owners have unlimited liability
C. Shareholders' liability is limited to
their investment
D. No legal identity
Answer: C
Rationale: Shareholders are only liable
up to the value of their shares.
, 4. Which document governs internal
management of a company?
A. Memorandum of Association
B. Articles of Association
C. Certificate of Incorporation
D. Prospectus
Answer: B
Rationale: Articles of Association set
rules for internal operations.
5. The process of forming a company is
called:
A. Liquidation
B. Incorporation
